Under the weight of scrutiny for alleged wrongdoing and impropriety, the entire board of the Public Investment Corp (PIC), Africa's largest pension manager, sent out a letter of resignation late on Friday.
The development throws the manager of more than R2-trillion of assets into a deeper crisis.
For months SA has been gripped by a number of probes into the operating of the state over the past decade, which has been marked by a series of scandals that have stretched all the way to the office of former president Jacob Zuma.
Since the start of 2019, the PIC has been the subject of an inquiry into some of its investment decisions, highlighted by its investment into technology company Ayo Technology, which is associated with one-time Zuma ally Iqbal Surve.
Eyebrows were also raised by the institution's support of the now collapsed VBS Mutual Bank that benefited some senior PIC employees.
The board "took a view that things have reached a stage where every decision the board takes may run the risk of having the lowest respect in the eyes of the public", board chairperson and deputy finance minister Mondli Gungubele told Business Times on Friday.
"There's been a lot of stories about the board, either through whistleblowing or through the media people expressing their views on this and that.
"And now lately we have to deal with Ayo and four board members have allegations against themselves.
"If I have to speak about myself, in my view this is a figment of the whistleblower's mind."
The PIC controversially underwrote Ayo's entire private share placement before its listing in late 2017 with a R4.3bn injection despite internal concerns that it was overvalued.
Since its December 2017 listing, its stock has plunged more than 53%.
The Government Employees Pension Fund (GEPF), whose funds the PIC manages, owns a 29% stake in the technology firm. The corporation is the largest single investor in the JSE and the biggest holder of government bonds.
"It is our view that next week the minister must have appointed a new board, call it interim, whatever you call it. That is the wish of the board," Gungubele said.
"The earliest possible because it's going to be difficult for the board. The board [has to be] committed to deal with the most fundamental issues that cannot wait at the moment."
Tito Mboweni, SA's sixth finance minister in four years, has already started the process of appointing an interim board for the PIC, Treasury spokesperson Jabulani Sikhakhane said.
"An announcement will be coming in due course. He will make the announcement soon after next week; it will definitely be before the announcement of the budget."
Forensic probe
The resignations follow a year in which half of the institution's executive committee have been suspended or have resigned, including former CEO Daniel Matjila, who was at the helm for more than four years.
Earlier this week, the inquiry into the PIC said it was immediately starting a forensic probe into allegations of impropriety made by an anonymous whistleblower against three PIC board members.
A former board member told the inquiry that the PIC would be better served without Gungubele chairing the board because of the perception of political interference.
Lumkile Mondi, senior economics lecturer at Wits University, said he didn't believe that the problems of the PIC would be resolved in the "short to medium term".
He said he didn't think the GEPF could completely take its money away from the PIC; however, it would need to re-evaluate how it allocated capital.
"It's amazing how many of these institutions have become so paralysed because of people pursing private interests. It's really shocking," Mondi said.
"I'm hoping South Africans are learning so much about constructing a democracy and why it's important to remain vigilant all the time.
"If not, it's so easy for democracy to collapse, as we have seen across the Limpopo."
The board turmoil at the PIC comes at a time when the corporation faces some pressing investment decisions in the coming weeks, none as urgent as over the rescue of ailing fashion retailer Edcon.
The owner of Edgars, which is currently closing stores and reducing floor space, is trying to secure R3bn in funding, with the PIC being central to those talks.
Grant Pattison, CEO of Edcon, said he was aware of the resignations.
"I don't know [what the impact will be], but I'm not concerned. I don't think the resignations will impact the Edcon transaction," he said.
"We think we are close, yes, but as you know we are awaiting official confirmation . On the hypothetical question, if there was a delay, I don't think it's terminal."
Edcon employs close to 140,000 permanent and contract employees.
Its closure would serve only to exacerbate the country's unemployment crisis.
On critical decisions that the board had to make, Gungubele hoped that none would have to be made urgently "unless it is clear that if a decision is not taken, there will be a damage". On the case of Edcon, he said it had come to the attention of the board, "but it appeared that to deal with it as PIC we would have gone beyond our mandate".
He said: "We went to the clients who give us a mandate [the GEPF] and said because it's beyond our mandate, it is them who can take a decision. We are awaiting [their decision] on that."
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