Union heads to court to demand information about PIC decisions | Fin24
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Union heads to court to demand information about PIC decisions

Aug 16 2018 18:28
Tehillah Niselow

The Public Servants Association (PSA) has filed a court application in a bid to force the minister of finance, the Public Investment Corporation (PIC) and the Government Employee Pension Fund (GEPF) to reveal information relating to the PIC board and the R5bn bridging loan granted to Eskom in February.

The PSA affidavit, filed on August 7, is brought in terms of the Promotion of Access to Information Act (PAIA). The union, which represents 237 000 members in the public service, states that it is concerned about the way the GEPF and the PIC are managing government employees’ pensions.

The court challenge by the PSA comes amid a commission of inquiry announced by President Cyril Ramaphosa into the asset manager on Thursday and a forensic investigation ordered by Finance Minister Nhlanhla Nene in July.

There has been concern about the PIC and its investment decisions, including reports that it would bail out South African Airways and shares purchased in Ayo Technologies.

The PSA has been vocal about demanding accountability from the PIC which manages around R2.2trn, the majority of which is workers’ pension funds.

PIC board selection

At the heart of the PSA’s application is the submission of a PAIA request to National Treasury in November. The union wanted information relating to the appointment of PIC board members since 2013 and records of how depositors’ nominations were taken into account.

The PIC Act of 2004 states: "The Minister [of Finance] must, when appointing the board, have due regard to the nominations submitted to him or her by the depositors."

In the affidavit, the PSA maintains that the PAIA request to Treasury for this information was never fulfilled.

The union, in its court papers, also states its concern that the board of the GEPF failed to exercise its fiduciary duties as trustees of the pension fund for using assets under its control for "bailouts" of Eskom.

In a letter to parliament in February, PIC CEO Dr Dan Matjila said that the R5bn in "bridging finance" until the end of the month would achieve above market interest rates for the GEPF when it is paid back and was a smart investment while being backed by a government guarantee.

No government guarantee

The PSA argues in their court papers that none of the transaction documents relating to the Eskom loan confirmed the government guarantee was in place to back the cash-strapped power utility.

"It thus appears that there is no guarantee documentation relating to the bridging loan to Eskom, certainly not in the possession of the Minister, the National Treasury or the PIC," the affidavit states.

The PSA wants the high court to compel Treasury to explain the selection of PIC board members since April 1 2013 as well as provide a copy of the loan agreement to Eskom.

The union states that government employees have an interest in ensuring that pension funds are managed properly.

The PSA also believes that it is in the public interest for organs of state not to mislead the public and the only harm that can come from the release of the information they have requested of the court is reputational damage and embarrassment to the individuals involved in taking the decisions.

According to the PSA’s lawyer Hanneke Spies, a partner at Bell Dewar Inc, the application if unopposed will be heard on December 6 but they do expect some of the respondent to oppose the application.

Treasury said in an emailed response to Fin24 that the Ministry of Finance is reviewing the PSA application to determine an appropriate response.

PIC Head of Corporate Affairs Deon Botha said they had not yet received the notice of motion from the PSA and once they have been formally served with the papers, they will respond. 

* Update: This article was updated at 07:55 on Friday 17 August to include a response from the PIC. 

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