Hunt on for PIC’s lost billions

Deputy Finance Minister and Public Investment Corporation (PIC) chairpersonDavid Masondohas struck a firm tone on companies failing to service PIC loans, even as the asset manager reports strong growth, with assets rising from R2 trillion to R3.7 trillion over the past five years. His comments come amid renewed scrutiny of thePIC, with civil society organisations and the Bantu Holomisa-led United Democratic Movement calling for parliament to convene urgent public hearings into “ongoing governance failures, ethical breaches and poor investment decisions”. Holomisa has also called on the Auditor-General of South Africa and the Special Investigating Unit to conduct a forensic probe into the PIC’s Isibaya Fund and its broader Unlisted Investments Division, with a focus on politically connected deals, loss-making projects and compliance with theMpati Commissionrecommendations.

Business sentiment on the PIC remains divided. Business Unity South Africa chief executive Khulekani Mathe said decisions on loan approvals or rejections were ultimately matters between individual businesses and their financiers. The Black Business Council has urged restraint, warning against what it described as a coordinated campaign targeting the PIC’s unlisted investments, particularly the Isibaya Fund.

In an interview with theMail & Guardian, Masondo pushed back against criticism, expressing confidence in the government’s efforts to stabilise and reform the institution. He said that from 2022 to date, the PIC had funded 29 businesses with black ownership exceeding 50%. “Since I joined the PIC, the corporation’s debtors recovery book has totalled R19.3 billion, with R10bn having been recovered in the PIC bank account.

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The organisation is undergoing legal processes to recover the remaining R9.3bn, with R8.9bn recovered from Steinhoff.” He said the PIC’s transformation-focused investments had continued to expand. “The total value of these investments has amounted to R13.4bn. When we consider businesses with black ownership greater than 25%, 35 businesses have been funded with the value of investments totalling R18.1bn.

“If we combine businesses that are 50% plus and with 25% and 35%, the PIC has spent R18bn since 2022.” Black businesses funded by the PIC included Lona Group, Mahlako Energy Fund, Reimagine Fund, Southern Farms, Bambili Energy, SA SME Fund, Hlayisani Venture Capital Fund, Solcon Capital, IDF Capital and Trenstar, Infinite Partners, among others, he said. With more than R3 trillion in its asset portfolio, the PIC, which primarily serves the Government Employees Pension Fund — about 95% — has been under public scrutiny, with the Mpati commission having found that in many instances, sound policies, processes and frameworks were not adhered to.

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