Court overturns Dlamini suspension in blow to former PIC board

Suspended Public Investment Corporation (PIC) CEOPatrick Dlaminiscored a big victory on Tuesday when the high court in Pretoria set aside his suspension — a ruling that brings an element of leadership stability to the asset manager engulfed in a turf war. The court found that the decision of the erstwhile PIC board to suspend Dlamini last month did not hold water. Judge Nathan Mbongwe said the suspension breached the PIC Act, which provides that the minister of finance must appoint the CEO in consultation with the cabinet.

“The role of the board in this regard is limited to the selection and recommendation of a suitable candidate. The delegations of authority require that suspension of the CEO be recommended by the human resource & remuneration committee, initiated by the chairperson and approved by the minister in consultation with the cabinet,” the judgement reads. “None of these prerequisites were met.

The board acted unlawfully, without ministerial approval, and in disregard of its own policies.” The suspension of Dlamini in mid-July, just over a year into the role, led to a board exodus, which culminated in the appointment of a new board last week, headed bySeiso Mohai. Dlamini was suspended following a whistle-blower report that alleged wrongdoing on his part, particularly in the transaction that saw the company pay R430m to an outfit called Acapulco in a transaction gone wrong The previous board was chaired by deputy minister of financeDavid Masondo, who eventually ended up not seeing eye to eye with minister of financeEnoch Godongwanaon the PIC matters, including on Dlamini. Dlamini was suspended following a whistle-blower report that alleged wrongdoing on his part, particularly in the transaction that saw the company pay R430m to an outfit called Acapulco in a transaction gone wrong.

[paywall]

The transaction had been well advanced when Dlamini was appointed as PIC CEO a year ago. Acapulcoin 2013 received a R333.2m loan from the PIC to buy a 25% stake in Lanseria International Airport. Under the terms of the deal, Acapulco was expected to use reasonable commercial endeavours during the term to raise funds to refinance a portion of the capital loan amount. The final repayment of the capital loan amount was to fall on the 10th anniversary of the first advance date, which came in the latter part of 2023.

[/paywall]