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More calls to save PIC from 'state capture'

Sep 22 2017 18:04
Carin Smith

Cape Town - The Economic Freedom Fighters (EFF) has added its voice to that of the Congress of South African Trade Unions (Cosatu), the Federation of Unions of SA (Fedusa) and the Public Servants Association (PSA) in calling for vigilance to prevent workers' pension funds managed by the Public Investment Corporation (PIC) from being used to bail out struggling state-owned enterprises (SOEs) like South African Airways (SAA).

The PIC oversees about R1.86trn, which mainly consists of state employees’ retirement savings.

The EFF also wants Finance Minister Malusi Gigaba to be stripped of what it calls his unilateral powers to appoint board members to the the PIC.

The EFF called on both Cosatu and Fedusa to demand fair representation on the board of the PIC, so that they have a strong voice on the prudent management of their members’ pension funds.

According to Mbuyiseni Quintin Ndlozi, national spokesperson of the EFF, this call should be supported by all "sensible South Africans" in the light of what it deems Gigaba's bad track record at Transnet, Eskom and Denel while he was minister of public enterprises.

Fedusa has indicated that it feels there is no legal barrier preventing it from withdrawing its members' funds from the PIC.

Cosatu threatening to withdraw funds

Bloomberg reported earlier this week that Cosatu is considering replacing the PIC with privately owned fund managers.

Business Day, in turn, reported that in August Gigaba allegedly told Cosatu executives that he can’t guarantee there won’t be attempts to use PIC funds to recapitalise struggling SOEs and fund other projects.

Fin24 reported in September that SAA indicated in its corporate plan that the PIC could be a source of funding.

In Ndlozi's view, there are attempts to capture the PIC by means of a "witch hunt" on PIC CEO Daniel Matjila.

The Star newspaper earlier reported on an alleged attempt to remove Matjila. According to Bloomberg, this ignited concerns that the PIC could be drawn into the ANC’s internal battles and that its assets might be used to support struggling SOEs.

The PIC, however, expressed confidence in Matjila, denying an attempt to fire him.

Prudent management

In the view of the EFF, the PIC has up to now been prudently managing public servants pension funds and driving key developmental and transformational objectives.

According to the PIC website, its equity investments account for about 13% of the market value of the companies that trade on the JSE.

The EFF said it has written to the standing committee on finance to discuss the mandate, scope, and protection of the PIC. It will also request that Fedusa, Cosatu and all depositors’ representatives be allowed to make submissions on how the PIC should prudently manage their funds.

Earlier on Friday, Fin24 reported that the PSA expressed concern over the possibility that the government could use workers' pension funds to bail out SAA.

The PSA wants the Government Employees Pension Fund (GEPF) to confirm that its board is not considering any financial assistance to SAA.

In response, the GEPF said it has already indicated that a "bail-out" for SAA is not under consideration.

However, the PSA said it is not satisfied with the GEPF's assurances.

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fedusa  |  cosatu  |  gepf  |  pic  |  eff  |  sa economy  |  pension funds
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