The National Union of Public Service and Allied Workers (NUPSAW) is exasperated with the lack of adherence to governance structures and principles that continue to be breached without correction at the Public Investment Corporation (PIC). How incompetent executives at PIC, which manages pension funds on behalf of GEPF, its biggest client, Compensation Fund (CF) and Unemployment Insurance Fund (UIF), have been criticised for its careless adherence to governance in certain instances, abuse of executive offices.

Executives have continued to harass and victimise workers, putting R70-Billion rand of the public worker’s retirement fund at the risk of generating losses – in the process. To be exact, we should start with the PIC Board. The PIC Amendment Act (2019) stipulates who can be appointed to the PIC board, specifically the chair. As the government’s representative, the Act provides that the minister of finance “may designate the Deputy Minister in the economic cluster” to be appointed as chairperson of the board. The PIC board says that it continues to operate with the designated chairperson, making it illegitimate if not unconstitutional. Further to this, it seems to be a culture of the PIC to breach governance structures even internally. For example, the staff of PIC recently wrote a letter to the Investment Committee to intervene with certain irregularities regarding illegal divisional restructures and the creation of non-existent positions and appointments to benefit a particular individual to the disadvantage of the Unlisted Investments team.

The consequence of this noncompliance speaks to a more significant issue of competence within the organisation. An asset manager with ill-equipped leadership poses risks to pension funds. The appointment of incompetent managers is expressed in the lowest deployment of funds that Isibaya has ever seen under such leadership. The role of investment professionals is to assist against risk; when the first risk is to ease against incompetent and toxic managers, then the purpose of their work diminishes over time. Moreover, when executives would prefer to protect one person over an entire division, the question becomes, what are the motives driving this behaviour? Finally, there is another issue of cadre deployment for the preparation of unauthorised transactions. There is a drive within Isibaya to appoint incompetent managers who frustrate investment professionals, and the investment process messes with unreasonable delays and failed transaction execution.
How does this impact the end beneficiary? Opportunity cost and the risk of failing to deliver on the Isibaya Mandate. The PIC management and executive cannot eradicate the PIC’s role in catalysing South Africa developments to benefit the narrow interest.

Over the past months, there has been dismal investment deployment due to the incapacity to recommend transactions timeously due to various factors, critical being technical incompetence of the investment space, which has limited PIC’s incremental impact role in the economy excluding Covid-19.

The unsustainable environment at the PIC, marked by abuse of power, purging of staff and questionable investment decisions, amongst others, has persisted despite several attempts to remedy the situation.

One of those attempts was establishing the Mpati commission of inquiry, which has now proven to be yet another time and money-wasted exercise. Part of the terms of reference of that commission was to find out whether the PIC’s investment decisions broke any laws or internal policies and whether PIC leaders victimised employees. The commission found substantial evidence backing these claims.

A year after that report was published, some of its crucial findings and recommendations have not yet been acted on. As a result, it is the view of the workers that the situation has deteriorated in respect to the working environment, and progress on investments has ground to a disruption.

Workers at Isibaya fund, which oversees unlisted assets (Isibaya) to the value of approximately 10% of the GEPF R2.2 trillion assets under management, were forced to write to the Investment Committee to raise their grievances, risking any further victimisation and potential job losses. This shows the workers’ commitment to the optimal functioning of the PIC, which is something management has continuously failed to demonstrate.

The restructuring process, which took place days after the divisional acting head Lusanda Kali was appointed, unusual without following due process or considering the input from employees, breached contract agreements, created an oppressive, hostile and defensive work environment. In addition to that, it also caused a lot of confusion and capacity challenges in some departments. Instead of engaging workers in a bid to resolve the standstill, Kali took the dictatorial approach, making it clear to them that it’s either her way or the highway.

We also take exception to the fact that Mr Sithole misrepresented facts at the Standing Committee on Finance (SCOF) on 12 May 2021 when questioned about the expiry of the investment mandate. Mr Sithole used his determination to speak about the surrounding mandate between PIC and GEPF intentionally legislated under the PIC Act instead of alluding to the expired Unlisted investment period entered into in 2016, bringing into question his integrity as a leader.

Therefore, others failed to renew or extend the Unlisted Mandate Commitment period – five years during which investments could have been made, a mandate with the division’s biggest client, the GEPF. This negligent behaviour has resulted in the stalling of deployment, furthering the impact on a fruitless year under Ms Kali. For example, an Impact Investing and Private Equity fund that was executed and allocated in 2016, which is significantly under-deployed, is currently dormant. In addition, staff efforts to senior management and executives failed. Hence, they could not process, and the transactions were hindered; and the investment period was not extended. To date, no one person has been held to account for this gross negligence and appalling failure in oversight, which speaks to competence.