PIC publishes unlisted assets
• DA welcomes disclosure because it is not required by law and details of portfolio go further than previous release
The Public Investment Corporation has published on its website details of its unlisted assets portfolio, which grew 52% to R67.89bn in the year to March, but it fell short of its own metrics for measuring governance, sustainability and environmental impact.
The Public Investment Corporation (PIC) has published on its website details of its unlisted assets portfolio, which grew 52% to R67.89bn in the year to March, but it fell short of its own metrics for measuring governance, sustainability and environmental impact.
The portfolio represents a relatively small portion of the R1.928-trillion of its assets. It is the first time the PIC has made these details available in such an accessible manner.
In 2016, it presented a hard copy of its unlisted investments to Parliament’s standing committee on finance. Media houses subsequently published that copy online.
The publication comes after Minister of Finance Malusi Gigaba wrote to the PIC board, directing it to conduct a forensic investigation into all PIC contracts on investments over the past two years.
The board would meet on Thursday to discuss how it would respond to the minister’s letter, deputy board chairman Xolani Mkhwanazi said.
He had earlier in the day told Parliament that the PIC was not investigating the origin of an apparent smear campaign against PIC CEO Dan Matjila.
The DA’s David Maynier welcomed the publication of the PIC’s unlisted assets, saying the disclosures were not required by law and went further than they had in 2016.
The PIC included details such as the lead sponsor on each transaction; an ESG score, which rates the investment’s environment impact, sustainability and governance; and commentary on how the entities had performed. It thus describes poultry producer Day Break Farms, which delivered a desultory internal rate of return of -45%, as having suffered from the “vagaries of the poultry sector” and a poor governance structure. It similarly did not mince its words on Independent Media, which delivered an internal rate of return of 7.5%, saying it suffered from “lack of proper leadership — the CEO position still vacant, constant restructuring as a result of changing business environment”.
Matjila told the parliamentary committee that it had not ruled out investing in state-owned enterprises, such as South African Airways (SAA), provided they met its investment criteria. The PIC has been in the spotlight after reports that the government was eyeing it as a means to recapitalise SAA and other stateowned enterprises.
It manages investments on behalf of the Government Employees Pension Fund, the Unemployment Insurance Fund and the Compensation Fund, in addition to a number of smaller funds. Its total assets under management stood at R1.928-trillion at the end of March.
Matjila said the PIC would consider investing in SAA if it implemented a turnaround strategy and improved governance.
Trade union federation Cosatu said it was disappointed that there was no guarantee that PIC funds would not be used to bail out state enterprises such as SAA. Zwelinzima Vavi, general secretary of the South African Federation of Trade Unions, said massive bail-outs for stateowned enterprises like SAA could bankrupt the PIC, with devastating consequences.
MASSIVE BAIL-OUTS FOR STATE-OWNED ENTERPRISES LIKE SAA COULD BANKRUPT PIC WITH CONSEQUENCES THE PIC WOULD CONSIDER INVESTING IN SAA IF IT IMPLEMENTED IMPROVED GOVERNANCE