Opinion | A tale of failure and greed

The Public Investment Corporation (PIC) was established in 2004 to manage the R3,5 trillion fund of existing and future state pensioners on behalf of the Government Employees Pension Fund. It has the prime objective to grow the fund and improve the income for pensioners through investment in socioeconomic growth and development across the country. The PIC did everything conceivable but grow its unlisted portfolio, leaving pensioners worse off year after year.

This driven by malfeasance which festers inside the institution, commanded by the morally depraved outside. The PIC does have hundreds of honest officials but the reality reflects a PIC rampant with people and policy driven failures which have obliterated immense wealth and incurred huge debt write-offs amid staggering value destruction. In its unlisted portfolio of 150 investments, 78 lost over R18 billion, while 60 underperformed and several languished in business rescue.

The value decimating investments continued with its listed portfolio as well, including Steinhoff, AfriSam, Ayo Technologies, Day Break Farms and Independent Newspapers. The striking irony amid the fiasco was a call by some politicians to increase funding by R30 billion in its unlisted portfolio. This clearly started to put the lights out.

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Patrick Dlamini, the CEO of the PIC (recently suspended by the board), said that it is committed to salvaging value from its failed investments and they have strived to learn lessons from these to strengthen their processes and identify risk, flag human error and vastly improve accountability. One economist said it is a disgrace that the PIC made deals to enrich selected business executives, some private equity and consortiums which are tied to the ruling party, and to then call it empowerment. This is vast wealth accrual for a small minority without the requisite value addition through creative malevolence. Pastor Frederick Lewis Donaldson said in a sermon in 1925 at Westminster Abbey: “Wealth without work is a social sin.” A business analyst said that the many struggling PIC investments are unmatched in terms of the disrespect for pensioners and their families, government as the main shareholder, wealth managers and economists.

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