'PIC needs independent chair '
The interim chair of the board of the Public Investment Corporation (PIC), Reuel Khoza, has backed growing calls for an end to the practice of having a politician chairing the board of Africa's biggest asset manager. Khoza - whose interim board is in charge until the end of July - told Business Times on Friday that in future the PIC board should have an independent chair. "The board should not be, in my opinion, chaired by a political figure. It does appear that stance is supported by a good number within government," he said."There are those who for some reason, it could be cultural lag, might be open to manipulation; perhaps it's easier to manipulate a political colleague as opposed to an independent person." Until the interim board was appointed in July last year with Khoza as chair, the deputy minister of finance would automatically be chair of the PIC, which manages R2-trillion on behalf of the government pension fund and other state entities. But the commission of inquiry into malfeasance at the fund manager, led by retired judge Lex Mpati, has strongly recommended that this practice come to an end. During the hearings, former PIC executives complained that cabinet reshuffles destabilise the board when the post of deputy finance minister changes hands. Those who testified also pointed out that the people in this post often don't have the requisite skills to chair the board of a complex financial entity. In its final report, the commission said: "The deputy minister of finance should not be the PIC chairperson. This has caused considerable instability. Skills needed to chair the board may well be different from those that the deputy minister of finance brings. The role of the chairperson should be defined, and the skills and personal qualities needed, codified in the memorandum of incorporation." The Mpati commission found that the PIC had made some questionable investment decisions, which had cost the asset manager billions of rands. These included investments in Steinhoff, Independent Media, Ayo Technologies and VBS Mutual Bank. It found that former CEO Dan Matjila (who is seeking judicial review of the report) wielded considerable influence in deciding where PIC money should be invested and exerted pressure on investment panels. Khoza said an advisory panel is being set up to expedite investigations and bring those responsible to account. The panel will be chaired by a retired judge and will include members of the Hawks and the National Prosecuting Authority, who will advise the PIC on which transgressions to prioritise for prosecution. "Part of the brief is that there have been culprits in the form of individuals, in the form of corporations, and both of those categories of offenders will have to be pursued," he said. Khoza said that even before the Mpati report was released the PIC board had begun fixing some of the governance and administrative failures, for example by separating the positions of CEO and chief investment officer, which Matjila had held simultaneously. A new CEO has been identified, whose name has been submitted to the cabinet for approval.The interim board is also re-introducing the position of COO and is in the process of establishing an ethics office, which will provide guidance and deal with issues of conscience and morality. "Unless you have a chief ethics officer who is the compunction of the organisation, then you are likely to fall foul of ethical conduct. That's why we have insisted that this position be established," Khoza said.