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<p>After months of processes and thorough consideration, Abel Moffat Sithole has been appointed as the new CEO of the Public Investment Corporation. Mr Sithole is currently the Principal Executive Officer of the Government Employees Pension Fund and the Commissioner of the Financial Sector Conduct Authority. PIC Chairperson, Dr Reuel Khoza joins CNBC Africa for more.</p>


Incoming CEO to help restore confidence

Incoming CEO to help restore confidence, says PIC chair Reuel Khoza


<p>On Wednesday, South African Finance Minister Tito Mboweni announced the appointment of Abel Sithole as the Chief Executive Officer of the Public Investment Corporation (PIC) and Executive Director on the Board of Directors.</p>



<p>The following statement provides more details:</p>



<p><strong>APPOINTMENT OF MR ABEL MOFFAT SITHOLE AS CHIEF EXECUTIVE OFFICER (CEO) OF THE PUBLIC INVESTMENT CORPORATION (PIC)</strong></p>



<p>The Minister of Finance, Mr Tito Mboweni, is pleased to announce that Cabinet has approved that the Board of Directors of the PIC proceeds with the appointment of Mr Abel Moffat Sithole as the CEO of the PIC and Executive Director on the Board of Directors for a period of five years. The Chairman of the PIC, Dr Reuel Khoza, will elaborate on the process followed for the appointment and on the terms and conditions of the employment of Mr Sithole.</p>



<p>Mr Sithole is currently the Principal Executive Officer of the Government Employees Pension Fund (GEPF) and the Commissioner of the Financial Sector Conduct Authority (FSCA). Before joining the GEPF in 2015, Mr Sithole was a Deputy Executive Director at the Institute of Futures Research, University of Stellenbosch Business School. He also has a number of non-executive roles.</p>



<p>Mr Vuyani Hako, the Executive Head: Properties has been the acting CEO. Minister Mboweni said: “We thank Mr Hako for his contribution at the PIC, steering the organisation through very difficult times. We also congratulate Mr Sithole on his appointment as CEO and wish him well in leading the organisation and in restoring its integrity”.</p>



<p><strong>Issued by the Ministry of Finance</strong></p>


Abel_Sithole2

Abel Sithole appointed as CEO of South Africa’s PIC

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<p>The Public Investment Corporation, which manages assets on behalf of the Government Employees Pension Fund was at GEPF&#8217;s annual results presentation. Reuel Khoza, Chairperson of the Public Investment Corporation provided an update on when it will appoint a new CEO and explained why it is not conducting a witch hunt against Iqbal Survé, who heads Sekunjalo Investments.</p>


Reuel Khoza: PIC not conducting a witch hunt against Iqbal Survé

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<p>The Public Investment Corporation delivered its annual results in Parliament today. During its presentation to the standing committee on finance the PIC said it is considering an  application to liquidate Sekunjalo and revealed that it grew  assets under management by R48 billion to R2.1 trillion. Chairman of the PIC Board, Dr Reuel Khoza spoke to CNBC Africa about its investment in Old Mutual.</p>


PIC weighs in on Old Mutual


<p>By Fifi Peters, CNBC Africa anchor and reporter </p>



<p><em>Update with comment from the Public Investment Corporation (PIC). Old Mutual&#8217;s largest shareholder. </em> </p>



<p>As financial services group <a href="https://www.cnbcafrica.com/zdnl-mc/2019/08/12/old-mutual-peter-moyo-to-meet-in-court-friday/">Old Mutual prepares for another face-off with its former CEO</a> Peter Moyo in court today, its second largest shareholder, Allan Gray, says it has asked the insurer to make contingency plans. </p>



<p>The Cape Town based investment manager, said it had met with Old
Mutual’s board in light of the ongoing litigation between the company and Moyo.
</p>



<p>Moyo is seeking reinstatement at the insurer after <a href="https://www.cnbcafrica.com/videos/2019/06/20/old-mutuals-moyo-sacked-for-deteriorating-relationship-with-trevor-manuel-lawyer/">being
fired in June</a> and wants Old Mutual’s non-executive directors to be declared
delinquent, whereas Old Mutual wants its dismissal of him to be declared valid.
</p>



<p>“The board must make contingency plans,” said Allan Gray
Portfolio Manager, Jacques Plaut </p>



<p>“It must have a plan for various different future scenarios,”
added Plaut, without divulging specific details.</p>



<p>Allan Gray, one of SA’s largest asset managers, owns 9.8% of Old
Mutual. </p>



<p>The shares, managed on behalf of its clients that range from
high-net worth individuals to working class South Africans, are mainly held in
Allan Gray’s Equity,
Balanced and Tax Free Savings Funds.</p>



<p>Old Mutual’s largest shareholder, the Public Investment Corporation refused to be drawn in on the matter.</p>



<p>In an emailed statement from its head of Corporate Affairs, Deon Botha it said: “The Public Investment Corporation (PIC) is not party to the legal proceedings your enquiry refers to. The PIC is a responsible asset manager. It is inappropriate to expect of the PIC to make public statements about a matter pending before court, and ultimately, one that arises from a dispute between a board of an investee company and its CEO.”</p>



<p>The PIC holds a 10.8% stake in the financial services group, according Old Mutual’s 2018 annual report.</p>



<p>The dispute has
coincided with an 18% decline in Old Mutual’s share price on the JSE since May
24 when <a href="https://www.cnbcafrica.com/videos/2019/05/24/old-mutual-ceo-suspended-shares-slide/">Moyo
was first suspended by the board</a> for a breakdown in trust and confidence. </p>



<p>But Allan Gray said
it was not clear that significant value had been destroyed by the boardroom
tussle.</p>



<p>“We aren’t sure whether much value has in fact been destroyed.
The share price has fallen a lot, but the market may be overreacting,” said
Plaut</p>



<p>Other factors that
could have weighed on the share price includes soured sentiment towards SA
stocks amid slow economic growth and downgrade fears, heighted global
uncertainty from the US-China trade war as well as the ongoing litigation
between the company’s board and its former CEO.</p>



<p>Old Mutual <a href="https://www.cnbcafrica.com/zdnl-mc/2019/07/30/judge-orders-peter-moyo-to-be-reinstated-as-ceo-of-old-mutual/">lost
the first round in court</a> against its axed CEO, Moyo on July 30, when the
South Gauteng Court in Johannesburg found SA’s largest insurer unlawfully fired
its former boss and ordered for his immediate reinstatement.</p>



<p>The company, however, barred the former CEO from resuming his
duties the next day (July 31) on its belief that the decision to appeal Judge
Brian Mashile’s ruling, nullified the order which also interdicted Old Mutual
from finding a permanent new CEO.</p>



<p>The same court and
judge that heard the original case will also hear today’s arguments.</p>



<p>Old Mutual’s board
has said the loss of trust and confidence in the former CEO that ultimately
resulted in his firing was due to his mishandling of a conflict of interest in
his private company NMT Capital, in which Old Mutual owns a 20% stake.</p>



<p>Moyo says the
conflict of interest is a “manufactured smokescreen”. </p>



<p>He claims he is being
victimised for blowing the whistle on the board chair, Trevor Manuel’s alleged
triple conflict of interest in overseeing the managed separation of
the SA business from its UK operations as a director of Old Mutual Ltd, Old Mutual PLC and Rothschild, one
of the advisers during the separation.</p>



<p>Manuel also sits on
Allan Gray Orbis
Foundation Endowment board. Allan Gray said this did not present a conflict of
interest on its part.</p>



<p>“This endowment was formed by a donation from Mr Allan Gray. The
Endowment supports various education and job creation initiatives in South
Africa. The Endowment is totally separate from the Allan Gray Limited operating
entity so Allan Gray Ltd is not conflicted,” said Plaut.</p>


Why Old Mutual’s second largest investor met with it over dispute with former CEO Peter Moyo

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<p>The board of the Public Investment Corporation have requested that Finance Minister Tito Mboweni dissolve it. Mondli Gungubele, Deputy Minister of finance and Chairperson of the Public Investment Corporation joins CNBC Africa for more.</p>


PIC Chair Gungubele explains why the board asked to be dissolved

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<p>The commission of Inquiry investigating the Public Investment Corporation continues their proceedings today in Pretoria. From the three witnesses that have testified so far there has been no evidence provided for misconduct or corruption in their respective departments at the PIC. CNBC Africa Kopano Gumbi share more details.</p>


PIC exec Fidelis Madavo suspended

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<p>Shareholders of Texton Property Fund have voted against the repurchase of shares from the Public Investment Corporation. Joining CNBC Africa to discuss the ramifications of Texton shareholders’ refusing to the share buyback is Sinesipho Maninjwa, CA &#038; Independent Analyst.</p>


Texton shareholders vote against share buy back

<p>Considering that so many column inches in the media have been dedicated to questioning my integrity and my competency as the Chief Executive Officer (CEO) of the Public Investment Corporation (PIC), I feel compelled to respond to what I regard to be unsubstantiated, malicious and spurious allegations being made against me.</p>
<p>Having spent many years working in investment management, my professional career has mostly been defined by two: logic and reason.</p>
<p>Therefore, in defending my name, please allow me to take a dispassionate, logical and reasoned view of the allegations being made against me.</p>
<p>I want to begin by stating what some media publications have been remiss in mentioning: the undeniably successful performance of the PIC over the period that I have been at the helm. Performance highlights for the financial year ended March 2018 include:</p>
<ul>
<li>Growth in assets under management to R2.083 trillion.</li>
<li>PIC profit in 2018 was R417 million.</li>
<li>Returns on investments over the last ten years for GEPF: 10.25%.</li>
<li>Returns on investments during the previous ten years for the UIF: 9.23%.</li>
</ul>
<p>Moreover, under my leadership, the PIC has consistently achieved clean audits – a rare phenomenon in the public sector.</p>
<p>To add context to what we do at the PIC, the Government Employees Pension Fund (GEPF) makes up 87.12% of the funds that the PIC manages. Other clients include the Unemployment Insurance Fund (UIF), Compensation Commissioner Fund (CC), Compensation Commissioner Pension Fund (CP) and Associated Institutions Pension Fund (AIPF).</p>
<p>Some of the reports carried in the media seem to  infer that I &#8211; and I alone &#8211; determine which companies the PIC invests in or grants loans to. And that I personally manage the assets within the PIC’s portfolio. This is plainly irrational.</p>
<p>PIC has established and stringent investment management and approval processes, which involve several investment professionals and committees. Governance regarding risk management within the PIC is a stringent process that complies with regulatory requirements and best global and industry practices. In addition to ensuring that the legislations, laws, regulations, policies and best practice standards are all met, the Risk and Compliance division ensures that Portfolio Managers manage the investment portfolios to the benefit of clients.</p>
<p>Moreover, some media reports have implied that the PIC invests as it pleases. Again, a gross inaccuracy. We operate within the mandates granted to us by our clients, that prescribe strict parameters from which we never deviate.</p>
<p><strong>Unlisted Investments</strong></p>
<p>Let me start with the assertion that I have been reckless by investing R70 billion in unlisted companies, with the inference being that loans have been granted to companies that were irregular and thus under or non-performing.</p>
<p>First, while delivering healthy financial returns on our investments is critical, contributing to the county’s broader socio-economic development is also part and parcel of the PIC’s mandate. Through investments made in companies owned by black entrepreneurs, the overarching theme for our unlisted investments is transformation and inclusive growth. Our focus in this regard, therefore, has been to invest in sectors that have the potential to encourage employment and development, whilst generating the requisite financial returns.</p>
<p>These sectors have included energy, healthcare and affordable housing and student accommodation. The results of our efforts during my tenure as CEO include, amongst others, the following:</p>
<ul>
<li>As many as 152 226 jobs created and sustained.</li>
<li>The construction of 22 new hospitals, that supplied an additional 3 049 beds for our public health system.</li>
<li>Some 45 349 affordable houses were constructed, as well as 11 900 student accommodation facilities.</li>
<li>Support and finance made available to 785 SMEs.</li>
</ul>
<p>The multiplier effect of all our unlisted investments concerning future development? Incalculable.</p>
<p>At the PIC, we also practise what we preach. Since 2007, we have led the way with transformation in asset management. Today black asset managers are responsible for the management of more than R100bn of assets from the PIC.</p>
<p>I’m proud to say that transformation is also evident throughout the PIC. The  almost 400 employees at the Corporation fully represent the diverse demographics of South Africa, with the majority being youth who graduated from the country’s previously marginalized universities.</p>
<p><strong>Steinhoff</strong></p>
<p>Let me now move to another contentious issue, the losses incurred through our investment in Steinhoff. Yes, they were significant and deeply regrettable. However, in defence of the allegation of ineptitude with regards to our exposure in Steinhoff from those who seem to have 20-20 vision in hindsight, the question posed should not be “Why was the PIC duped by Steinhoff? However, rather, “Who wasn’t duped by Steinhoff?”</p>
<p>As a retail group with a global presence, Steinhoff was considered a sound investment and a darling of the JSE, as well as various other stock exchanges around the world. However, the fact remains that our exposure in Steinhoff represented less than 1% of the PICs assets under management, or one of over 300 securities in the PIC portfolio, so the loss was thoroughly cushioned.  Most importantly, Steinhoff was a constituent in the index that the PIC tracks in line with its investment mandate.</p>
<p><strong>VBS </strong></p>
<p>As for my name being linked to the debacle that is VBS, this has to be the lowest of the low in allegations. The mere suggestion that I would accept a bribe – R5 million in cash is abhorrent to me.</p>
<p>This was the allegation made by one VBS executive, to another, before being relayed to Advocate Terry Motau SC, who along with Werksman’s Attorneys, authored the “Great Bank Heist” report on VBS.</p>
<p>Advocate Motau is on record as stating that he “Cannot make a definitive finding against me and that it warrants investigation.” I welcome any investigation regarding this allegation, which I consider to be a classic case of hearsay based on evidence of two people who according to the report are heavily implicated in malfeasance at VBS.</p>
<p>I also resolutely stand by my previous statement to the press in which I stated: “I emphatically reject any suggestion that I may have received R5m to facilitate further funding for VBS Mutual Bank. The portfolio management committee of the PIC turned down an application to put more money into VBS Mutual Bank, two days before VBS was placed under curatorship.”</p>
<p><strong>Nepotism</strong></p>
<p>Another allegation made against me is one of nepotism. According to some unknown (and I suspect disgruntled) whistle-blower at the PIC. He or she has been circulating anonymous emails, which infer that I used my position to arrange employment at the PIC for my son irregularly.</p>
<p>Not only is this utterly devoid of truth – it is malicious, spiteful and asinine.</p>
<p>Yes, there is a gentleman by the surname of Matjila who was appointed as a manager of a   canteen at the office park where PIC once occupied with other corporates. However, the gentleman in question is not my son, and he is not related to me in any way or form.</p>
<p>The spuriousness of this allegation is such that if we follow this reasoning to its logical conclusion, it would mean that no one by the name of Kganyago can be employed at the Reserve Bank. Also, no one by the name of Maseko can ever be hired by Telkom. It’s an allegation so deficient in logic that it’s laughable.</p>
<p><strong>Many agendas</strong></p>
<p>The accusation of impropriety, that I advanced loans to a woman with whom I was allegedly romantically involved has already been debunked through legitimate investigative processes.</p>
<p>First, it saddens me greatly that a black businesswoman, Ms Pretty Louw, who was seeking investment for her company would have certain people immediately jump to the cynical, sexist and sensationalised conclusion that sexual favours played a role in granting her the financial assistance she sought.</p>
<p>These allegations would have been deeply insulting to the lady in question, and to me as a dedicated husband and father.</p>
<p>Second, it was repeatedly mentioned as part of this disproven allegation that I was pressurised by the then intelligence minister, Mr David Mahlobo, to invest in Ms Louw’s company.</p>
<p>As the PIC CEO, I have on countless occasions been approached by many people of influence, bankers, financiers, businesspeople and politicians across the political spectrum &#8211; with requests to invest in various companies.</p>
<p>However, as very few of these recommendations have shown any merit from an investment point of view or have met our stringent compliance practices, the majority have not been considered by the PIC.</p>
<p>Managing the expectations of politicians and people of influence is a fine line that I continually have to negotiate – a tightrope if you will. Therefore, it is inevitable and logical that some individuals who have received a negative response to their suggestion would harbour disgruntlement and even enmity towards me.</p>
<p>I wish to categorically state, that I have never been  partisan nor leaned towards any faction of a political party where it concerns my work.</p>
<p>The only masters I serve are the 1 273 125 active members of the GEPF and the 450 322 pensioners and beneficiaries who, after a lifetime of toil, deserve a secure, prosperous and dignified retirement for the rest of their lives.  I am equally indebted to members workers and employers who continue to contribute towards UIF and CC, CP, as well as other clients who expect nothing more than return on their investments.</p>
<p><strong>Competency</strong></p>
<p>PIC’s ability to deliver returns on the investments under my leadership has also been questioned. Please forgive my immodesty here, but if I lack regarding competency, or if my performance has in any way been under par, then why is it that as recently as 2016, I, the PIC has received accolades such as:</p>
<ul>
<li>CEM, a global benchmarking company, rated the PIC one of the best asset managers that has given the GEPF positive returns at a very low cost.</li>
<li>Responsible Investor (RI): Commended for the Best Responsible Investing Report by an Asset Manager of Large Funds.</li>
<li>European Magazine Awards: Best SOE &#8211; Africa European Magazine Awards: Best Corporate Governance &#8211; South African Business Leadership Awards: Africa Industry Personality of The Year.</li>
<li>European Magazine Awards: Asset Management Firm of the Year &#8211; South Africa.</li>
</ul>
<p>Up to this point, I have spent 15 years at the PIC, first as Chief Investment Officer for nine years, and four years as CEO. During my latter position, I have had the honour of working alongside three Deputy Ministers of Finance who were appointed chairpersons of the PIC. These are Mr Nhlanhla Nene, Mr Mcebisi Jonas, Mr. Sifiso Buthelezi and the current chair, the Mr Mondli Gungubele. I am grateful for their assistance and support over the last four years.</p>
<p>I also would like to thank all  dedicated and committed employees at the PIC. Your dedication, diligence and commitment to serving our clients, who are our primary concern, is an inspiration to me.</p>
<p>I want to thank my family and friends who have stood by me and who continue to support me with so much faith and conviction during these trying times.</p>
<p>Finally, I am greatly encouraged that the South African legal system, in its inexorable quest for justice, has zero countenance for gossip, innuendo and hearsay. Also, I am eternally grateful that the McCarthyesque assertions that have been aimed at me – a rumour here, a whisper there, anonymous text messages and emails – will never be deciding factors in the challenges that I face.</p>
<p>I greatly welcome the Commission of Inquiry as instituted by President Cyril Ramaphosa, and believe the inquiry will present the PIC with a proper opportunity to present facts about its corporate governance standards, operations and investment decisions in order to restore public- and shareholder confidence in the institution.</p>
<p>I am 100% confident the stability and the security of the PIC will continue unabated.</p>
<p>I humbly thank you, for the opportunity of presenting my side of the story.</p>
<p>Sincerely,</p>
<p>Dr Dan Matjila</p>
<p>Chief Executive Officer of the Public Investment Corporation</p>
<p>&nbsp;</p>


An open letter to South Africa from Dr Dan Matjila, CEO of PIC, addressing allegations against him

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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

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<p>Public Investment Corporation is about to get a showdown with President Cyril Ramaphosa announcing people to head up a Commission of Inquiry into the institution. Individuals and some entities have long been calling for investigations into processes in PIC with allegations of pension funds held in trust being misused. UDM Leader, Bantu Holomisa joins CNBC Africa for more.</p>


Names to head up commission of inquiry into embattled PIC announced

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<p>Finance Minister Nhlanhla Nene has apologised to South Africans for meeting the controversial Gupta family between 2009 and 2014. Over and above the meetings, it was also reported that a business partner of Nene&#8217;s son had scored millions of rand in a questionable investment by the Public Investment Corporation in Mozambique. In his statement, Nene called on anyone with evidence to hand it to the commission of inquiry into state capture. CNBC Africa&#8217;s Karabo Letlhatlha shares more insight.</p>


SA FinMin Nene apologises for Gupta meetings

<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>
<p><iframe loading="lazy" src="https://www.youtube.com/embed/z492P8-f4B8" width="560" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>
<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

<p>Almost four years after <a href="http://cnbc.africa/tag/african-bank/page/2/">African Bank</a> was placed under curatorship, another bank has followed suit.</p>
<p>VBS Mutual Bank established in 1982, was placed under curatorship from 5pm CAT on Sunday.</p>
<p>The bank which is registered with the South African Reserve Bank (SARB) as a mutual bank shot to fame after <a href="http://cnbc.africa/videos/2017/02/02/vbs-mutual-bank-chairman-speaks-on-zumas-nkandla-loan/">providing a loan to South Africa&#8217;s former President Jacob Zuma for Nkandla</a>.</p>
<p>SizweNtsalubaGobodo will be the curator of VBS Mutual Bank and will be represented by Anoosh Rooplal.</p>
<p>The Reserve Bank has guaranteed retail deposits amounting to R50 000 per depositor and said VBS remains open for business. According to SARB “the curator will ensure that all loans due are collected as part of the normal collections processes, but also importantly that lending and transactional banking services continue”.</p>
<p>VBS’s main clientele comes from Limpopo. It has 22 051 deposit and 1 105 loan accounts.</p>
<p>The bank has no bondholders. Only instruments qualifying as primary equity.</p>
<p>The decision to place VBS under curatorship was taken due to its increasing liquidity challenges over the last 18 months emanating from a failure of the board of directors and executive management to manage the mutual bank&#8217;s rapid growth and the funding of its liquidity, SARB revealed at a press conference held at its headquarters.</p>
<p>In a statement read to journalists at the conference, Reserve Bank Governor Lesetja Kganyago, dressed casually, said “the liquidity challenges emanated from the concentration of deposits from municipalities and was exacerbated by the termination of other sizeable deposits and the inability to source sufficient funding timeously. It was highly risky for VBS to take sizeable municipal deposits that were short-term and lend them long term.”</p>
<p>It was also in breach of the Banks Act which forbids mutual banks from taking deposits from municipalities, only commercial banks can, revealed Kganyago. The breach was picked up 18 months ago and despite warnings for SARB – VBS continued to take deposits from municipalities. Only on the 26th February did it decide to apply for a commercial bank licence, a process that could take between 12-18 months.</p>
<p>Three years ago, when VBS started accepting deposits from municipalities, it had a balance sheet of about R200 million. This rapidly grew to R2 billion.</p>
<p>The liquidity challenges faced by VBS made it difficult for it to settle obligations in the National Payments System on several occasions. This came to a head on the 16th February when the bank failed to honour its obligation. At this point SARB started engaging with VBS and its two largest two shareholders (the Public Investment Corporation and Vele) on a way forward, after an exhaustive process no solution was found and the decision was taken to place VBS under curatorship, says Kganyago.</p>
<p>Kganyago said banks are placed under curatorship if you believe it might be salvageable and to prevent a run on the bank.</p>
<p>According to National Treasury the aim of curatorship is ultimately to turn the mutual bank around and nurse it back to health. “This is in contrast with liquidation, where the mutual bank is closed down”. Treasury cites African Bank as an example of a bank which emerged stronger after curatorship.</p>


Why black-owned bank VBS was placed under curatorship

<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>


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