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PIC inquiry puts investing processes under the spotlight

PIC's executive head of impact investment Roy Rajdhar said it was inevitable that some transactions could go wrong.

First Witness Wilna Louw who is the Acting Secretary of the PIC takes the stand on 21 January 2019. Picture: Kgomotso Modise/EWN

PRETORIA - The commission of inquiry into the Public Investment Corporation (PIC) has spent its first day looking at processes that are followed when investing.

The commission is looking into allegations of impropriety regarding various investments and is being presided over by former Supreme Court of Appeal President Lex Mpati.

Three PIC employees testified at the proceedings in Pretoria on Monday.

When asked by former Reserve Bank Governor Gill Marcus what measures the PIC uses in its evaluation process, executive head of impact investment Roy Rajdhar said it was inevitable that some transactions could go wrong.

“And then what happens in those instances is that we will constitute what we call a workout team which will incorporate members from different teams and external service providers who can assist in turnaround.”

The PIC has been criticised for poor decisions such as Ayo investments which saw its share price plummet by over 90% in less than two years.

Rajdhar says they introduced a special task team to improve the pic’s investment processes.

When all three witnesses, including Wilna Louw and Sholto Dolamo, were asked if they were aware of any impropriety in their divisions - they all answered no.

As the first witness at the inquiry, Louw has given details about how people are appointed at the PIC.

Louw has told the commission that while it’s not law to have the deputy finance minister appointed as board chair of the PIC, there is a strategic logical reason behind this.

“The appointment of the deputy minister as chairman of the PIC board is based on the fact that the Government Employees Pension Fund is our biggest client and constitutes to approximately 88% of the PIC’s funds under management.”

She said the nomination of board members is opened to the public before the list is narrowed down.

“If we get, for instance, the 500 they will submit it to us and we go through it and we compile our list in terms of the qualifications and skills needed for the board.”

Louw says the final decision on the appointment of board members lies with the Cabinet, despite the names that have been submitted by the board.

(Edited by Mihlali Ntsabo)