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Scopa chair: PIC's legal advice is wrong

The commission of inquiry into the Public Investment Corporation does not trump the work of the Standing Committee of Public Accounts (Scopa), as was suggested by the investment manager's lawyers, it was argued on Wednesday.

At a meeting with Scopa and the PIC, several Members of Parliament (MPs) raised concerns over the legal advice the investment manager received regarding the disclosure of information to Parliament.

Fin24 reported earlier that the PIC would not disclose information on its investments to Scopa, based on advice from its lawyers at Norton Rose Fulbright.

According to a letter from PIC chair and Deputy Finance Minister Mondli Gungubele, some of the information, if disclosed, could lead to the PIC being subjected to litigation from third parties over confidential information of clients.

However, MPs probed the PIC's reasoning to seek a legal opinion on the matter in the first place.

'Malicious compliance'

Godi wanted minutes of the meeting where the resolution took place. But CEO Dan Matjila and deputy chairperson Xolani Mkhwanazi were both present at the meeting and indicated that the resolution was made over a phone call to lawyers.

Gungubele said the legal opinion was sought when it became apparent that the disclosure would affect PIC clients. MPs were not convinced of this and implied that the PIC wanted to hide something.

ANC MP Thapelo Chiloane said Scopa's interests related to media reports, in the public domain, tackling the PIC's argument that there was a confidentiality issue.

"I don't think the PIC has dealt with us in good faith," Inkatha Freedom Party MP Mkhuleko Hlengwa said.

He said the PIC's appearance before the committee was an act of "malicious compliance".

He also wanted to know how much the legal opinion cost because, in his view, it was wasteful expenditure. He suggested the PIC was "buying time" and hoping that Scopa's request would "die a natural death", especially as the term of the fifth Parliament is drawing to a close.

'Irrational' opinion

According to Hlengwa, the legal opinion was irrational, particularly in that lawyers said the authority of the commission and its "obligation" to do its work "efficiently" is "more important and trumps" the inquiry by Scopa.

"I do not accept this legal opinion – whoever may have written it – they have not applied their minds and they have given personal opinion. The nerve, cheek and audacity to think that Parliament can be trumped by something else speaks to the shortsightedness of understanding of the checks and balances of the constitutional structure."

President Cyril Ramaphosa announced the commission of inquiry into the PIC on August 17, and in October released the terms of reference.

Hlengwa pointed out that the commission's inquiry came long after Scopa's request to interrogate the PIC as far back as June. "Where do they (lawyers) get the cheek and audacity to say we are an afterthought?"

DA MP David Maynier also argued that there were flaws in the legal opinion. One was that the scope of the inquiry by the commission and Scopa are the same, he said. This is not true, he argued, as Scopa's inquiry calls for information over three years, while the commission focuses on two years.

Maynier added that the PIC is not following its legal opinion correctly, in that only certain information cannot be disclosed and not all. The lawyer's letter indicates that the PIC must claim confidentiality to investment information which would leave the PIC and its clients at a disadvantage.  

If the committee agrees to some form of confidentiality then the information can be disclosed, Maynier said.

'Patently false'

Godi agreed that the legal opinion relating to Scopa's relevance in relation to the commission is irrelevant. He said it is "patently false" that the work of commission is more important than the work of Scopa.

"The executive cannot be above the work of Parliament and the work of Parliament cannot be above the executive. The two spheres are separate [and] independent," he said.

Godi added that the work of Scopa is to assist institutions on getting things right. He said the inquiry will create a platform for the PIC to put forward its challenges so solutions can be sought.

The PIC has been requested to make the information available to the committee by next Wednesday and the parties will reconvene in two weeks.

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