Public servants union still suing Gigaba over PIC concerns | Fin24
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Public servants union still suing Gigaba over PIC concerns

Dec 07 2017 06:20
Yolandi Groenewald

Johannesburg - The Public Servants Association (PSA) said this week it planned to continue with legal action against Finance Minister Malusi Gigaba to protect public servants’ pension investments, despite a letter from Gigaba asking for a meeting in January with its leaders.

Gigaba’s continued failure to respond to the union’s demands left it with no other option, it said in a statement.  

The union said it had requested the minister in three letters dated September 5, as well as 12 and 26 October 2017, to engage with labour about the management of public servants’ pensions invested at the Public Investments Corporation (PIC) through the Government Employees’ Pension Fund (GEPF).

But for the past three months the minister simply ignored the correspondence.

This compelled the PSA’s attorneys to issue a letter of compliance to the minister at the end of November. The minister then responded in a letter, dated December 1, 2017, indicating that a meeting with the union would be scheduled during the third week of January 2018.

PSA Deputy General Manager Tahir Maepa said Gigaba’s response has not addressed the specific issues raised by the PSA.

According to Maepa the majority (207 000) of the PSA’s members are also members of the GEPF. This is 12.9% of the GEPF’s 1.2 million active members and its 400 000 pensioners and beneficiaries. The PIC is the fund’s primary investment agency.

“The PSA is determined to ensure that public servants’ pensions are protected, and to make sure the PIC management team is not forced into shady deals,” he said. “The union will thus continue with court action in this matter.”

He said it was unfortunate that the PSA had to continue with legal action to enforce compliance by the Minister in a matter that is already governed by legislation.

In the three letters to Gigaba, the PSA requested him to amend the Memorandum of Incorporation to include GEPF representation on the PIC board and to fill three existing vacancies on the board with labour representatives.

The PIC board is appointed by the finance minister, CEO Dan Matjila explained at a briefing in October.

In addition the union also demanded that 80% of the PIC’s board must comprise of public servants and called for the removal of current board members with conflicting interests.

The PSA also wants full disclosure of non-listed companies that have already been granted funding by the PIC and the freezing of funding for new investments of this nature.

It also asked the Minister to investigate the possibility of an independent forensic audit ordered by Gigaba.

In October Gigaba ordered the audit into the PIC’s investments over the past two years in response to “public events” that had taken place. Gigaba did not explicitly say that these were related to allegations against Matjila.

In September Matjila had to explain himself to the PIC board after being accused of siphoning PIC funds to those connected to him. The board cleared him of all wrongdoing.

Maepa reiterated that Gigaba’s probe was an effort to get rid of “sound managers” at the PIC. This is to “bring their own people to have access to the PIC money”, he alleged.

Previously Matjila said that Treasury has no say in the investment mandate of its clients. He also said that although it may be possible for the corporate management of the PIC to be captured, it would be difficult to capture its clients and their mandates as there are a "fair amount" of checks and balances.

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