Heat on PIC to release details of unlisted investments
Corporation is under pressure to disclose unlisted portfolio in view of questionable investment decisions
The Public Investment Corporation (PIC), Africa’s largest asset manager, is under pressure to release details of its unlisted investment portfolio valued at about R70bn.
The PIC, which has more than R2-trillion in assets under management, invests on behalf of the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund and the Compensation Fund, among others.
The transparency of the PIC’s investments has become critical in view of some of its questionable investment decisions and the bid by embattled state-owned companies such as SAA and Eskom to dip into its reserves.
DA finance spokesperson David Maynier has made an application to the PIC under the Promotion of Access to Information Act for the corporation to disclose its unlisted investment portfolio for 2017/18. It has disclosed these investments for the previous two years but has not done so in 2018.
The PIC’s head of corporate affairs, Deon Botha, said the PIC will “in due course” make its unlisted investments public, and insisted that the PIC supports the disclosure of its investments.
“We believe that disclosure of information should be made after the unlisted investments have gone through the valuation process, the clients have signed off on the valuations, and consent to publish details of these investments has been granted by the client,” the PIC said earlier in 2018.
Maynier said no provision has been made for hearings by parliament’s finance committee on the PIC’s 2017/18 annual report and financial statements.
“There seems to have been an about-turn when it comes to greater transparency at the Public Investment Corporation,” Maynier said. “The fact is that national treasury is now opposing provisions that would promote greater transparency that are contained in my private member’s bill, the Public Investment Corporation Amendment Bill, which is before the finance committee in parliament.”
The bill would oblige the PIC to disclose its listed and unlisted investment portfolio annually. The bill introduced by the finance committee had a similar provision.
The treasury said during public hearings on the bills that it does not support the compulsory disclosure of investments. “The PIC as asset manager should not be compelled to disclose information about another entity, than to its clients that are also the asset owners (for example the GEPF), without consent,” the treasury said. This was also the view of the GEPF and the PIC.
Maynier said there should be detailed disclosure by the PIC about its investments, especially investments in the unlisted investment portfolio, because this will serve as a major disincentive to “rent seekers” with political influence who want to raid the PIC.
Maynier said he has asked finance committee chair Yunus Carrim to schedule a hearing with the PIC in the fourth term of parliament.
The nature of some of the investments made by the PIC will come under the scrutiny of the judicial commission of inquiry established by President Cyril Ramaphosa under the chairmanship of retired judge Lex Mpati, assisted by former Reserve Bank governor Gill Marcus and business person Emmanuel Lediga. It will inquire and make findings on whether certain of the PIC’s transactions contravened PIC policy, or resulted in any undue benefit for any PIC director or employee and whether any PIC director or employee used his or her position to improperly benefit another person.
The role of the PIC board will also be probed as well as internal matters such as the treatment of whistle-blowers and discrimination in remuneration policy. The inquiry is limited to events that took place in 2017 and 2018 and was established in the wake of allegations of impropriety by PIC CEO Dan Matjila.
Ramaphosa has given the commission until February 15 2019 to submit an interim report, and until April 15 2019 for a final report.