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<p>Another major South African company loses its CEO, this time it’s Group Five’s Solomon Themba Mosai, the now former CEO. Themba’s post will be filled by non-executive director, Dr Thabo Kgogo who is already holding the position as interim CEO. According to the company it is restructuring and plans to focus on developments, investments and concessions. The share price has tumbled since the day began. Viv Govender from Rand Swiss joins CNBC Africa for more.</p>


Is the PIC the solution to Group Five’s problems?

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<p>South Africa&#8217;s PIC inquiry kicked off today with Vuyani Hako, the executive head of property as he shared his knowledge about alleged impropriety in the organisation. This was followed by a testimony from Albert Van Driel a representative from the Association for Monitoring and Advocacy of Government Pensions. CNBC Africa&#8217;s Kopano Gumbi reports.</p>


More revelations on PIC maladministration

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<p>Millions of public servants in country have their pension invested with the Public Investment Corporation. Billions of rands are alleged to be at risk as PIC CEO and CFO are accused of misappropriating funds. This week an independent forensic report has been submitted for finance minister on these allegations. Mugwena Maluleke, SADTU&#8217;s General Secretary joins CNBC Africa for more.</p>


SADTU outlines changes it wants to see at PIC

<p>JOHANNESBURG (Reuters) &#8211; South Africa’s President Cyril Ramaphosa on Wednesday appointed a judicial inquiry into the 2 trillion rand ($142 billion) state pension fund, a government gazette said, following corruption allegations.</p>
<p>The PIC is Africa’s biggest pension fund and the biggest investor in South Africa’s economy holding a large volume of bonds issued by government and state-owned firms.</p>
<p>The gazette notice said it will investigate “persistent and continued negative reports about alleged improprieties regarding investments” by the Public Investment Corporation (PIC), which manages assets on behalf of the government employees.</p>
<p>Ramaphosa said the inquiry should issue a final report by latest April next year.</p>
<p>In May, opposition parties called for an investigation into the pension fund’s chief executive Dan Matjila, accusing him of misuse of funds and careless investment decisions.</p>
<p>Matjila has denied the allegations and was also backed by the Treasury, which oversees the PIC.</p>
<p>The PIC’s spokesman could not immediately comment and referred any questions to the Treasury.</p>
<p>In 2017, Matjila was cleared of any wrongdoing by an internal audit committee that looked into the allegations.</p>
<p>But the collapse of VBS Mutual Bank early this year, where the fund has a 25 percent stake, and the resignations of two PIC employees linked to the fraud have raised new questions.</p>
<p>The PIC also has stakes in blue-chip companies across various sectors such as miner Anglo American Platinum, lender Barclays Africa and retailer Shoprite.</p>
<p>($1 = 14.0966 rand)</p>
<p>Reporting by Mfuneko Toyana; Editing by James Macharia</p>


South Africa’s Ramaphosa appoints judicial inquiry into $142 billion state pension fund, here’s why…

<p>Issued by the Ministry of Finance</p>
<p>I have completed the review of the documents1 and evidence regarding the governance issues at the Public Investment Corporation (PIC), as well as the allegations against the CEO of the state-owned fund manager.</p>
<p>Taking these into account, as well as other developments that have unfolded recently, I will announce the decisive steps to be taken to address the PIC’s governance issues and allegations against the PIC CEO before the end of this week, after I have met with the PIC’s board of directors.</p>
<p>My approach to the oversight of state-owned entities is that the shareholder ministry should ensure that a board of directors and management with the requisite skills and experience are appointed, and that the shareholder ministry conveys (through a shareholder compact) to the board its expectations of the public institution.</p>
<p>Once this is done, and the entity lives up to expectations, the shareholder ministry should have no business second-guessing decisions by the board, so long as these decisions are in line with the mandate of the public institution and in keeping with the compact the board of directors entered into with the shareholder ministry. Of course, when the board and management of the entity fail to live up to expectations, the shareholder ministry should intervene appropriately, following due process.</p>
<p>This approach should also inform interventions aimed at rebuilding state-owned entities. Political office bearers should not act in a manner that undermines good governance and due process. Indeed, it is the meddling in the affairs of state-owned entities, the second-guessing of the decisions of the governance structures of these entities, and failure to adhere to good governance practices, that have contributed to the mismanagement of state-owned entities and enabled the malfeasance that we have seen.</p>
<p>I am mindful that some in our society believe that I have taken longer to deal with the PIC matters. However, the need for transparency and accountability in dealing with state-owned entities must be balanced against the need to follow due process and ensure that proper governance is observed.</p>
<p>I believe that the measures I will announce this week will ultimately strengthen the PIC’s governance and restore public trust in this important public institution.</p>
<p>1 The Minister of Finance asked the Chairperson of the PIC board on 14 May 2018 for the board’s detailed response (including relevant documents) to the allegations raised in a media article, all internal audit and other reports relating to these allegations, and the board’s view on whether disciplinary action should be taken against the CEO and other PIC executives.</p>


SA Treasury to deal with African investment fund Public Investment Corporation

<p><em>Over the weekend it emerged that an official at the Public Investment Corporation (PIC) was allegedly bribed to secure funding for VBS. On Friday, the African investment fund had this to say&#8230;</em></p>
<p>The Public Investment Corporation (PIC) this morning informed its Board of Directors that the Executive Head for Legal Counsel, Governance and Compliance, Mr Ernest Nesane, has resigned. His resignation takes immediate effect and has duly been accepted by the PIC.</p>
		
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<p>Mr Nesane testified before the forensic investigation into VBS Mutual Bank earlier this week. Following his evidence, the PIC was made aware of serious allegations of impropriety against  Mr Nesane, who served as one of two PIC-delegated Directors on the Board of VBS Bank, until the bank was placed under curatorship by the regulator – the South African Reserve Bank &#8211; in March this year.</p>
<p><strong>READ: </strong><a href="http://cnbc.africa/news/financial/2018/07/07/vbs-mutual-bank-curator-launches-urgent-court-application-heres-why/">VBS Mutual Bank curator launches urgent court application, here’s why…</a></p>
<p>The other PIC-delegated Director on the VBS Board, Mr Paul Magula, was dismissed from the PIC earlier this year. Magula was the Executive Head: Risk Management for the PIC.  As company directors and PIC executives, both Nesane and Magula were entrusted with duty of care to ensure that the institution and its business practices apply the highest standards of ethics and good corporate governance.</p>
		
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<p>The PIC instituted a disciplinary enquiry against Mr Magula in relation to the performance of his duties.  He was subjected to a disciplinary hearing, which was presided over by an independent Senior Counsel and, after being found guilty on all charges proffered against him, Magula was summarily dismissed for poor performance.</p>
<p>The PIC is concerned about the developments that have come to light since the commencement of the VBS enquiry and more so that two of its former employees have been implicated of impropriety in their personal capacity.</p>
		
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<p>The PIC is concerned about the evidence that has been put before VBS enquiry to date, which points to impropriety on the side of these two former PIC executives and has resolved to appoint a forensic investigation to probe all transactions in relation to its investment in VBS Mutual Bank. The PIC is a shareholder in VBS, holding approximately 25% of the company’s equity.</p>
		
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<p>The scope of the investigation, including its terms of reference and the timelines will be made known once the forensic investigator has been appointed. The findings of the PIC’s forensic investigation into VBS will be presented to the PIC Board.</p>
<p>The Government Employees Pension Fund (GEPF) inherited its shareholding in VBS from Government Pension Fund of Venda, after the discontinuation and amalgamation of the latter into GEPF in terms of the Government Employees Pension Law of 1996. Further investment in VBS bank was made in 2002 as part of the PIC’s Isibaya Fund portfolio, which focuses on unlisted investments. The investment was approved after a thorough investment evaluation process and due diligence process by the investment management team.</p>
<p>The PIC has noted media references in an affidavit by the VBS curator last week that an unnamed PIC executive allegedly received a R5 million bribe to facilitate payment of R350 million towards VBS. According to the PIC’s investment records a revolving credit facility amounting to R350 million for VBS was approved in 2015 by the Priority Sector, Small and Medium Enterprise Fund Investment Panel, a sub-committee of the PIC’s Investment Committee).</p>
<p>This was almost two years before the alleged bribe, cited in the curator’s affidavit, would have been paid to an unnamed PIC executive. The PIC fully cooperates with the SARB, the curator, and the forensic investigation instituted by the curator, into VBS.  The PIC supports any appropriate action against those responsible for the demise of VBS and those involved in any corrupt practices, including the demand for, the payment of, or accepting of bribes.  The PIC expect of its employees to act with integrity and in an ethical manner</p>
<p>Should there be any proof that a PIC employee has received such a bribe, the PIC will immediately institute the appropriate disciplinary proceedings and report the matter to law enforcement authorities.</p>
<p>The PIC hopes that the forensic investigation will assist in determining if any, or to what extent, PIC officials were involved in the demise of VBS bank. The PIC will not tolerate any form of wrongdoing amongst its employees and related parties, which could potentially undermine the PIC’s objective and legal mandate of generating positive returns for its clients.</p>
<p>The PIC reiterates its commitment to work closely with the appointed curator, Sizwe NtsalubaGobodo, and all other stakeholders, and supports every effort by the SARB to restore VBS to a position where it can trade again on a commercial basis in terms of its banking license.</p>

African investment fund Public Investment Corporation’s Executive Head resign over VBS

<p>The Public Investment Corporation (PIC), one of Africa’s largest investment managers, will defend itself in court against allegations raised by South African opposition party, the United Democratic Movement (UDM) in an <a href="http://cnbc.africa/wp-content/uploads/2018/06/20180625_OL_Pres_HolB_letter-to-Mr-Ramaphosa-re-PIC-Labashe-and-Harrith_FIN-WarJ-3.pdf">Open Letter</a> to President Cyril Ramaphosa.</p>
<p>In the letter UDM&#8217;s leader Bantu Holomisa claims the PIC <a href="http://cnbc.africa/wp-content/uploads/2018/06/20180625_OL_Pres_HolB_letter-to-Mr-Ramaphosa-re-PIC-Labashe-and-Harrith_FIN-WarJ-3.pdf">was allegedly fleeced by Harith and Lebashe, see video.</a></p>
<p>Investment firms Harith and Lebashe <a href="http://cnbc.africa/wp-content/uploads/2018/06/Joint-Media-Statement1.pdf">refute the allegations</a> calling them &#8220;unfounded and vexatious&#8221;, &#8220;unsubstantiated and unfounded&#8221;. They argue that Holomisa&#8217;s letter came at the expense of both entities, professional reputations and aimed to attract public attention for Holomisa&#8217;s own political gain. Read the full letter here: <a href="http://cnbc.africa/wp-content/uploads/2018/06/Joint-Media-Statement1.pdf">Joint-Media-Statement1</a></p>
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<p>In a strongly worded statement the PIC said:<br />
<em>“Earlier this month the UDM brought an urgent application in the North Gauteng High Court, Pretoria, in which it seeks for the suspension of the PIC CEO, Dr. Daniel Matjila. The PIC intends to oppose this application and is seeking appropriate legal advice to this effect. <a href="http://20180625_OL_Pres_HolB_letter-to-Mr-Ramaphosa-re-PIC-Labashe-and-Harrith_FIN-WarJ-3">Submitting a letter with new allegations against the PIC</a> and a number of other business entities to the office of President Cyril Ramaphosa, will not deter the PIC from defending itself before court in order to show that the UDM’s allegations are malicious, patently false and imminently contestable.</em></p>
<p><em>&#8220;We wish to reiterate our stance that the PIC follows a rigorous investment process in all its dealings and investments.  The PIC’s investment processes is such that no one person – in particular the PIC CEO &#8211; is vested with all the powers to unilaterally make investment decisions. The PIC manages the funds of all its clients within strictly prescribed investment mandates determined by its clients, is regulated by the Financial Sector Conduct Authority (previously the Financial Services Board), is subject to provisions the Public Finance Management Act (PFMA) and is audited by the Auditor General. We affirm that no amount of defamation and public attacks will desist the PIC from its mandate, which include enabling broad economic participation by all groups of South Africans, and Africans in particular.</em></p>
<p><em>“Details of the PIC’s Investment Process – including deal origination, screening, due diligence and deal structuring – are explained in 2017 Integrated Annual Report from pages 34 to 36 at the link, which is available at <a href="http://www.pic.gov.za/wp-content/uploads/2012/04/Integrated-Annual-Report-2017.pdf">http://www.pic.gov.za/wp-content/uploads/2012/04/Integrated-Annual-Report-2017.pdf</a>”</em></p>


Multimillion dollar African investment fund Public Investment Corporation to defend itself in court against UDM

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<p>The Government Employees Pension Fund, the biggest pension fund in Africa, says 2018 is proving to be a good year for its investments so far.</p>


GEPF outlines investment strategy

<p>South Africa’s Public Investment Corporation (PIC), Africa’s biggest investment fund, said on Tuesday that without a 5 billion rand ($420 million) loan it advanced to cash-strapped utility Eskom, the utility would have defaulted on its existing debts with lenders.</p>
<div id="attachment_298821" style="width: 860px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-298821" class="wp-image-298821 size-full" src="http://cnbc.africa/wp-content/uploads/2018/02/Eskom_Megawatt_2-GettyImages.jpg" alt="" width="850" height="566" /><p id="caption-attachment-298821" class="wp-caption-text">A general view of the headquarter of the embattled South African main electricity provider ESKOM is pictured on February 4, 2015 in Johannesburg. Photo: Getty Images. </p></div>
<p class="">The PIC, which holds a large chunk of government bonds and stakes in leading South African companies, said last week it had given the country’s sole power supplier the loan to fund the utility’s operations in February.</p>
<p class="">($1 = 11.9000 rand)</p>
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<p class="Attribution_content_27_rw">Reporting by Tanisha Heiberg; Editing by James Macharia</p>
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South Africa’s power utility Eskom would have defaulted without PIC loan

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<p>The PIC has bought a 25 per cent stake in South African stock exchange, ZAR X, on behalf of the Government Employees Pension Fund. ZAR X currently has a trading value of R3.7 billion.</p>


What will Zar X do with PIC money?

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<p><em><span class="fn author-name">Jannie Rossouw | </span>University of the Witwatersrand</em></p>
<p><em>A corporate scandal unfolding around one of the largest businesses coming out of South Africa, Steinhoff, has become a major cause for concern. It threatens to wipe out hundreds of billions of rand invested on behalf of many people – rich as well as ordinary South Africans. Sibonelo Radebe asked Jannie Rossouw to interrogate the saga.</em></p>
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<p><strong>What do you read from these allegations of corporate corruption?</strong></p>
<p>The Steinhoff scandal is disturbing because it points to a serious gap in the checks and balances in the investment management space. A scandal of this magnitude should not have occurred if the systems with their multiple layers were working.</p>
<p>It’s still early days but it seems as if a multiple of highly paid professional layers failed investors. This includes auditors, asset managers and non executive directors who in their different roles should ensure that the company’s accounts are as close to the truth as possible.</p>
<p>Steinhoff share price collapsed by more than 90%, wiping off nearly €10 billion in shareholder value in about three days following the resignation of the company’s CEO, Markus Jooste, after news that German prosecutors were investigating the company for alleged massive accounting fraud. Steinhoff is listed on both the Johannesburg Stock Exchange and Frankfurt Stock Exchange.</p>
<p>Steinhoff shares were the darling of most fund and asset managers in South Africa and across the globe. We must ask questions why these entities, which draw enormous fees, failed to pick up the alleged irregularities when it seems like they should have done so if they were doing their jobs properly.</p>
<p><strong>How big is the damage caused by this scandal?</strong></p>
<p>It’s still early days but some people are already tagging this scandal as the biggest corporate failure in the history of the Johannesburg Stock Exchange. With more than 40 retailing brands in over 30 countries, Steinhoff was positioned as one of the largest companies by market capitalisation on the exchange. Its market value of close to R300 billion as recorded earlier this year placed it in the top 10, flanked by other South African corporate giants like media giant Naspers, luxury products specialist Richemont, resources giant Anglo American, petrochemicals firm Sasol as well as two big banks Standard Bank and Firstrand.</p>
<p>If Steinhoff’s stock doesn’t recover the capital losses of share investors who bought at inflated prices will be massive.</p>
<p>Steinhoff started off as a South African based company but built itself into a global retail business with significant interests in western Europe. As a result it attracted prominent investors. In South Africa, these include the Public Investment Corporation which invests on behalf of the Government Employees Pension Fund among other public entities. The Public Investment Corporation is reported to hold 10% of Steinhoff’s total shares which means its losses reached more than R10 billion after the share price collapsed.</p>
<p>It is therefore of the utmost importance and in the interest of all involved – particularly direct and indirect investors – that the Steinhoff matter be brought to a swift closure. Swift closure should be followed by legal action against and punishment of all those implicated.</p>
<p><strong>How wide spread is such behaviour?</strong></p>
<p>Each time a major scandal surfaces, regulatory gaps are identified and new measures are put in place to plug the apparent holes. But the scandals keep coming.</p>
<p>South Africa has had its fair share of corporate scandals with the most recent being a list of companies linked to the Gupta family inspired state capture. Big names like Naspers, KPMG, McKinsey and SAP have been caught in the extensive web of corruption allegedly driven by the Guptas who have close ties to the country’s president.</p>
<p>Some commentators have linked the Steinhoff saga to the broader ethical challenges facing South Africa. The integrity of some people in key positions of authority in both the public and private sectors is being questioned. This includes the country’s President Jacob Zuma who stands accused of violating the oath of office.</p>
<p><strong>What must be done?</strong></p>
<p>Despite the best efforts, it’s impossible to regulate for integrity and ethical behaviour. The one effective way that behaviour can be changed is through legal process and by means of tough punishment.</p>
<p>At this point in time we are still unsure of the degree of corporate rot in Steinhoff. Numerous allegations have been made, but the world now waits for the company’s delayed audit report to see the full extent of possible corporate fraud. Steinhoff must act swiftly in informing shareholders and other stakeholders about the true financial health of the company.</p>
<p>The Board of directors of Steinhoff is responsible for the financial health and the financial reporting of the company. The problems at the company resulting in the serious decline in the share price, raise the question whether the Board members should continue to hold office. Under the watch of the current Board a massive destruction in shareholder value took place.</p>
<p>No Board replacing the current one can do worse, as there is simply hardly any shareholder value left to destroy. Will the current Board do the honourable thing and step aside?</p>
<p>If fraud is proven, I want to see Steinhoff executives serve jail terms. They have caused immeasurable harm to many people. This is the only way in which unethical and fraudulent behaviour can be out-rooted and integrity restored.</p>
<p>From a proper investigation of the affairs of Steinhoff, possible regulatory gaps should also be identified and eradicated. Nevertheless, no structure of regulation and supervision can replace the single most important requirement for successful business conduct: Ethical behaviour. In South Africa we need ethical behaviour at all levels, namely the government, businesses and civil society.</p>
<p><img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/88905/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />The board of directors of Steinhoff is responsible for the financial health and the financial reporting of the company. The problems at the company resulting in the serious decline in the share price, raise the question whether the board members should continue to hold office. Under the watch of the current Board a massive destruction in shareholder value took place.<br />
No board replacing the current one can do worse, as there is simply hardly any shareholder value left to destroy. Will the current board do the honourable thing and step aside?</p>
<p>This article was originally published on The Conversation.</p>


Op-Ed: Steinhoff scandal points to major gaps in stopping unethical corporate behaviour

<p>BERLIN/JOHANNESBURG (Reuters) &#8211; South African tycoon Christo Wiese resigned on Thursday as chairman of Steinhoff (<span id="“symbol_SNHG.DE_0”"><a href="https://www.reuters.com/finance/stocks/overview?symbol=SNHG.DE">SNHG.DE</a></span>), the latest setback for the retail group in the throes of an accounting scandal.</p>
<p>Once a must-have for investors who backed its reinvention from small furniture outfit into a retail empire, Steinhoff has seen its shares crash more than 80 percent since last week when it ordered an investigation into its accounts and parted ways with long-serving chief executive Markus Jooste.</p>
<div class="DPSlot_container_2dHIN StandardArticleBody_dp-slot-inline_eUPBt" data-ad-type="canvas"> Steinhoff said Wiese, its top shareholder and chairman who stood in as chief executive last week, had offered to step down to reinforce independent governance and address any possible conflict of interest.</div>
<p>Wiese has been chairman since last year and a board member since 2013. He owns about 22 percent of the company, the stake he built in 2014 when he sold his clothing retailer Pepkor to Steinhoff via a combination of cash and shares.</p>
<div class="DPSlot_container_2dHIN StandardArticleBody_dp-slot-inline_eUPBt">Steinhoff named Heather Sonn, a member of the supervisory board and its independent sub-committee, as acting chairperson, and said Wiese’s son Jacob had also resigned from the board.</div>
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<div class="DPSlot_container_2dHIN StandardArticleBody_dp-slot-inline_eUPBt"><strong>READ:</strong> <a href="http://cnbc.africa/zdnl-mc/2017/12/11/steinhoff-board/"><span style="color: #111111; font-family: Roboto, sans-serif; font-size: 32px;">Steinhoff strengthens board with former Absa, Sanlam CEO &amp; investment banker</span></a></div>
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<p>The accounting scandal has tarnished the 76-year-old’s credentials as one of South Africa’s most respected stewards of shareholder capital.</p>
<p>It has also reduced his stake in Steinhoff: the company said on Thursday that banks have sold 98.4 million shares they used as security to lend Wiese 1.6 billion euros ($1.89 billion) to fund the purchase of additional shares in Steinhoff in September 2016.</p>
<p>Wiese started budget clothing retailer Pepkor in the 1960s, in Upington on the southern edges of the Kalahari desert, but is best known for transforming grocery retailer Shoprite (<span id="“symbol_SHPJ.J_1”"><a href="https://www.reuters.com/finance/stocks/overview?symbol=SHPJ.J">SHPJ.J</a></span>) from just six shops in the 1970s to hundreds of stores across Africa.</p>
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<p>He was also instrumental in reinventing Steinhoff, turning it from a modest distributor of furniture made in communist era eastern Europe to a global household goods retailer, vying for market share with the likes of IKEA.</p>
<p>But he suffered a setback this year when Steinhoff and Shoprite, in which Wiese owns a 20 percent stake, called off a deal in February to merge to create an African shopping giant, preventing Wiese from bringing more of his retail assets under one roof.</p>
<div> His resignation comes a day after Steinhoff’s second largest shareholder <a href="http://cnbc.africa/zdnl-mc/2017/12/13/pic-letter-of-demand/">Public Investment Corporation expressed discomfort about possible conflict of interest in having Wiese as interim chief executive</a>.</div>
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<p>Steinhoff, which moved its primary share listing from Johannesburg to Frankfurt two years ago, has been under investigation for suspected accounting fraud in Germany since 2015.</p>
<p>Four current and former managers are under suspicion of having overstated revenues at subsidiaries, prosecutors said.</p>
<p>Steinhoff has previously said that the investigation related to whether revenues were booked properly, and whether taxable profits were correctly declared.</p>
<div class="Attribution_attribution_o4ojT">
<p class="Attribution_content_27_rw">Reporting by Emma Thomasson; Editing by Susan Fenton</p>
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<div class="StandardArticleBody_trustBadgeContainer_1gqgJ"><span class="StandardArticleBody_trustBadgeTitle_7sKLj">Our Standards:</span><span class="trustBadgeUrl"><a href="http://thomsonreuters.com/en/about-us/trust-principles.html">The Thomson Reuters Trust Principles.</a></span></div>


Tycoon Christo Wiese resigns as chairman of Steinhoff to be replaced by former investment banker

<p>By Public Investment Corporation</p>
<p>The Investment Committee of the Government Employees Pension Fund (GEPF) and the Public Investment Corporation (PIC) held a meeting yesterday to discuss the recent developments regarding Steinhoff. It is important to note that notwithstanding the collapse in the Steinhoff share, the GEPF portfolio remains financially healthy, because of its diversified nature. It is also important to note that GEPF members’ benefits will not be changed by these developments, given that the GEPF is a defined benefit pension fund.</p>
<p><a href="http://cnbc.africa/category/insights/steinhoff/">Steinhoff scandal everything you should know</a></p>
<p>The investment loss recorded was 0.6% of the total GEPF portfolio on 6 December 2017. Despite the fall in Steinhoff share, the total GEPF equity portfolio had created a value of approximately R140 billion over the preceding 12 month period, and had performed better than the equity benchmark. Albeit a relatively small reduction in the total portfolio, and despite the signs of recovery in the share price this week, the PIC and GEPF remain deeply concerned about Steinhoff.</p>
<p>GEPF and PIC agree that the recent developments point to serious governance challenges at Steinhoff and that the following steps are necessary to secure the GEPF’s interest in the company:</p>
<ol>
<li>GEPF and PIC will insist on the appointment of at least two independent non-executive directors on the Steinhoff and Steinhoff Africa Retail (STAR) boards.</li>
<li>GEPF and PIC will highlight their discomfort with the lack of independence of the Board, including the possible conflict of interest by Dr Christo Wiese as interim Chief Executive Officer. Furthermore, the GEPF and PIC will express their concern about the Steinhoff Audit Committee concluding the terms of reference of the investigations independently.</li>
<li>GEPF and PIC will insist on representation on the Board Committee tasked with investigating the Steinhoff situation, so as to ensure that the process is transparent and that, amongst other matters, the terms of reference address critical governance issues.</li>
</ol>
<p>The GEPF and PIC believe that now, more than ever, the Steinhoff matter makes a case for the need to rotate auditors and long-serving board members in investee companies, an issue that the PIC has continuously raised.</p>
<p>The PIC would like to state that it has engaged with Steinhoff consistently but has often not received positive feedback from the company. Specifically, the PIC has previously pointed out structural issues relating to the material shareholding of the Steinhoff and Wiese families, which are perceived to create the dominance of controlling shareholder representatives on the Board and as a result, potential conflicts of interest.</p>
<p>The PIC has also raised concerns about the absence of a clear assessment of the risks introduced by the Steinhoff group’s acquisitive strategy as the company has become progressively complex.</p>
<p>Whilst the PIC has tried to use its position as a major shareholder to vote against some of the resolutions tabled at Steinhoff annual general meetings, the reality is that the PIC is only one amongst many shareholders who have voted differently on certain resolutions.</p>
<p>The PIC, on behalf of the GEPF will continue to raise environmental, social and governance issues in all its investee companies for the benefit of their stakeholders.</p>
<p>&nbsp;</p>


SA’s largest pension fund, Public Investment Corporation, GEPF letter of demand to Steinhoff

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<p>GEPF and PIC released a statement on the recent developments of governance challenges at Steinhoff and say that certain steps are necessary to secure the GEPF’s interest in the company.</p>


Why did governance slip under the watch of PIC, GEPF at Steinhoff?

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<p>GEPF and PIC released a statement on the recent developments of governance challenges at Steinhoff and say that certain steps are necessary to secure the GEPF’s interest in the company.</p>


Should the PIC be held accountable for Steinhoff?

<p>Words by PIC</p>
<p>The PIC applies the highest standards of corporate governance in administering its own affairs. As an institutional investor, the PIC expects the same commitment from all investee companies. Allegations of accounting irregularities by Steinhoff International Holdings N.V., that have exposed the company to possible criminal investigations, are serious concerns for the PIC. The PIC’s exposure to Steinhoff is approximately 10% of shares in issue. At this stage the PIC is awaiting further information from investigations by domestic and international regulators and/or law enforcement agencies, to decide on an appropriate course of action.</p>
<p><img loading="lazy" decoding="async" class="alignnone size-full wp-image-293654" src="http://cnbc.africa/wp-content/uploads/2017/12/Steinhoff-Intl.jpg" alt="" width="485" height="297" /></p>
<p>http://cnbc.africa/news/financial/2017/12/06/billionaire-christo-wiese-head-steinhoff-ceo-quits/</p>


Africa’s largest pension fund, the PIC reveals it exposure to Steinhoff

<p data-reactid="38">South Africa’s Public Investment Corporation (PIC) is planning to ask for two seats on the board of Lonmin by the end of 2017 and has suggested the platinum miner move its main listing to Johannesburg, its chief executive said.</p>
<p data-reactid="38"><img loading="lazy" decoding="async" class="aligncenter wp-image-292684 size-full" src="http://cnbc.africa/wp-content/uploads/2017/11/PIC.Logo_.jpg" alt="" width="800" height="531" /></p>
<p data-reactid="39">Lonmin, majority-owned by state-run PIC and listed in London since 1961, has been hobbled by persistently low platinum prices, rising costs and strikes, forcing it to tap investors three times in the last eight years.</p>
<p data-reactid="40">PIC, which manages $150 billion of government employee pensions, raised its stake in Lonmin in 2015 to 30 percent from 7 percent after a rights issue was undersubscribed.</p>
<p data-reactid="42">“We are a 30 percent shareholder, so we can ask for at least two board seats. We will do it soon. It has become an urgent matter now,” CEO Daniel Matjila told Reuters in an interview in London, adding: “They may put (in) conditions like asking for more money”.</p>
<p data-reactid="43">“We are more concerned about leadership. The chairman and the board should understand the challenges the company is facing and the role of the board and the executive should be clearly defined,” he said.</p>
<p>Lonmin spokeswoman Wendy Tlou said in a statement: “We would not want to comment on any statement the PIC might wish to make as we do engage with the PIC regularly as a shareholder.”</p>
<p data-reactid="45">Matjila said PIC’s state shareholders, keen to keep jobs in South Africa’s mining industry, had expressed concern in a recent meeting about its exposure to Lonmin and what action was being taken to “to mitigate risk”.</p>
<p data-reactid="46">“We don’t wish to exit. Let’s put representatives on the board to at least give guidance to management, to start taking the right decisions needed to stabilize the company and take it forward,” Matjila said.</p>
<p data-reactid="47">Lonmin, which is the world’s third biggest platinum producer with output 650,000 ounces in 2017, carrying out an operational review to boost margins by selling off assets and laying off employees.</p>
<p data-reactid="48">Its shares lost more than a third of their value on Nov. 3 after the firm delayed full-year results to complete the review.</p>
<p data-reactid="49">Lonmin said this month it had enough liquidity to fund the business through the review process. But analysts at Goldman Sachs and Citi, among others, have said Lonmin needs a cash boost urgently to ensure its survival.</p>
<p data-reactid="50">Matjila said PIC had also recommended Lonmin delist from London and move its main listing to Johannesburg, where it now has a secondary listing.</p>
<p data-reactid="51">“It’s a lot easier. If you can save a few pounds to keep one or two workers. My colleagues have spoken to Ben Magara, the CEO, about this. The PIC resources team has raised those issues,” Matjila said.</p>
<p data-reactid="52">“The London listing might be at a significant cost and what are the benefits? Is it liquidity? Is it trading? Is it attracting a lot of interest? I don’t think so.”</p>
<p data-reactid="53">Lonmin has said it would move its headquarters for its operations to South Africa to save costs.</p>
<p data-reactid="55">The firm’s liquidity crunch has eclipsed improvements in mine performance and a rise in net cash to $103 million at the end of September from $86 million at the end of June.</p>
<p>The 2015 cash call steadied Lonmin’s finances but the miner has still struggled since then.</p>
<p>Lonmin’s shares closed at 66 pence on Tuesday, hovering near their lowest on record. The stock was trading above 12 pounds at the start of 2011.</p>
<div class="Attribution_attribution_o4ojT" data-reactid="56">
<p class="Attribution_content_27_rw" data-reactid="57">Reporting by Zandi Shabalala, Veronica Brown and Pratima Desai; Editing by Edmund Blair and Alexander Smith</p>
</div>


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