Editorial: There must be consequences after PIC report

Gross negligence, complete disregard of the Public Investment Corporation’s (PIC’s) investment processes, suspicion of collusion, egregious violation of fiduciary duties by board members – these are some of the findings of the commission of inquiry led by retired Judge Lex Mpati, the former president of the Supreme Court of Appeal, into impropriety at Africa’s largest asset manager.

The report, released this week, laid the blame at the door of Dan Matjila, the PIC’s former chief executive, for the number of hugely questionable investments made during his tenure.

As a result, the commission recommended that the PIC must “explore where any personal liability is attached to the conduct” of Matjila – including with regard to any fruitless and wasteful expenditure which, if found to be the case, would make Matjila “liable to make the loss to the PIC whole”.

Under his watch, the report found that the PIC made investments in politically connected entities without following its own processes, and failed to conduct proper due diligence on other deals.

In the recent past, the country has seen findings and recommendations of commissions of inquiry ignored, and those implicated left untouched.

The Mpati report provides for a different set of actions to be taken by the different law enforcement agencies.

As most of these investments were long term, state agencies must move in quickly and attach those shareholdings that were illegitimately funded by the PIC.

This will prevent those individuals who stood to benefit from cashing in as the deals mature.

Investigations, leading to criminal trials, should be immediately instituted against PIC officials who bent rules, and against the beneficiaries who took short cuts.

Lastly, the PIC should be cleared of all political influence – the very thing that started the rot. We need to get back to the PIC that South Africa was once proud of.

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