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Gigaba and Matjila promise PIC funds are safe

Sep 26 2017 22:00
Yolandi Groenewald and Bloomberg

Johannesburg - Finance Minister Malusi Gigaba said reports that National Treasury wanted to dip into the funds of the Public Investment Corporation (PIC) to bail out state-owned enterprises (SOEs) were untrue. 

“There is no attempt to dip into pensions for reasons that are unscrupulous,” Gigaba told reporters in Pretoria after a meeting with the board of the PIC.

The media briefing was scheduled after reports claimed that Treasury was seeking to use PIC funds to finance struggling government entities such as South African Airways (SAA).

Over the weekend PIC boss Dan Matjila was quoted in an interview in the Sunday Times as saying that certain people “wanted the keys to the PIC”, and were lobbying to dismiss him.  

The PIC has almost R1.9trn in assets and handles pension funds for South African government workers, including nurses and teachers. 

But Matjila - who was seated next to Gigaba - dismissed the Sunday Times' interview as inaccurate, saying that the article was “distasteful, inaccurate, and designed to drive wedge between minister, myself and the board".

He didn’t expand on how his comments were misconstrued, saying he would issue a statement to clarify the matter on Wednesday.

Sound leadership     

Gigaba and Matjila made an effort to show they were on the same page.

Matjila said he enjoyed the support of the PIC’s board and had confidence in them.

“The PIC is where it is today and making a difference and contributing quite significantly to transformation, to the good return that clients are enjoying, because of the board you see around you," he said, adding that he still had "lots of confidence in them".

Gigaba, meanwhile, was full of praise for Matjila, saying that he “of course” had full faith in the PIC CEO.

“Without a shred of doubt,” he added.

The finance minister declined to say, however, whether he would extend Matjila’s contract when it expires in two and a half years' time.

“I am sure 'Doctor Dan' (Mtjila) would love to hear me. But we must respect government’s procedures,” he said.  

In the wake of reports last week that the finance ministry had approached the PIC for a bailout for SEOs, Gigaba emphasised that this was not the case.

The finance minister told journalists that Treasury had not requested R100bn from the PIC to bail out state owned enterprises, including SAA, which is faced with a tight deadline to pay its debts at the end of the month.

He said he called the meeting with the PIC to establish whether there was any truth to the reports that certain PIC board members wanted to capture the fund.

“I asked to be indicated who those board members are,” he said. “I also wanted to find out if there were any attempts to get rid of the CEO in nefarious ways, to be replaced with a certain candidate. And I wanted to know if the R100bn that has been reported about, has been requested.”

Gigaba said he wanted to make it very clear, that he personally did not get involved in the inner workings of the PIC, unless it is was via established and regulated channels.

Gigaba added that he took a “very dim view” of recent media articles about the PIC board and how his name got “dragged into issues about which I have no knowledge".

SAA funding

Director-general of the Treasury Dondo Mogajane said they were in constant contact with SAA creditors to negotiatiate a settlement that was acceptable regarding the national airline.

Mogajane said there were in talks about how to fund SAA and some would be presented to Cabinet on Wednesday.

He also confirmed that SAA had asked the PIC for a R6bn loan in May.

Matjila said this was not unusual, as state-owned enterprises often asked the PIC to invest in their bonds. The PIC had done due diligence on the airline, but the carrier fell short of the money manager’s investment criteria, he said.

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saa  |  treasury  |  pic  |  dan matjila  |  malusi ­gigaba  |  public sector  |  unions
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