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The DA will fight ANC’s bid to nationalise private pensions

Reports indicate that the African National Congress (ANC) is still intent on gunning for South Africans’ hard-earned pensions and retirement funds by imposing prescribed assets.

The ANC’s treasurer-general Paul Mashatile was today quoted stating that the ANC “will investigate the introduction of prescribed assets on financial institutions’ funds to unlock resources for investments in social and economic development”.

Due to their failures in government, the ANC is now set on forcing the Government Employees Pension Fund (GEPF) and private pension funds, through legislation, to free up capital for bankrupt state owned entities by using South Africans’ pensions and investments.

This is exactly the desperate tactics used by the apartheid regime when they could not raise capital in the international markets.

The failing ANC’s 24 years of corruption, mismanagement and their lack of political will has resulted in the public coffer running empty and investment drying up.

The United States, the United Kingdom, Germany, the Netherlands and Switzerland’s memorandum raising concerns over corruption, is proof of this. Even foreign investors recognize South Africa has an ANC problem.

Prescribing how financial institutions and pension funds must invest the life savings of pensioners is not the solution to the country’s economic woes. It will only give the ANC another bite at the corruption cherry.

The failing ANC government poses a great threat to South Africans’ pension funds and the Democratic Alliance will explore every avenue to fight for the protection of pensioners.

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DA to request SCOPA to probe the meltdown at the PIC

The Public Investment Corporation (PIC), which is responsible for investing more than R1.9 trillion, on behalf of a number of clients, most importantly the Government Employees Pension Fund, is in meltdown.

There is hardly a day that goes by without some new terrifying scandal surfacing at the PIC.

These include scandals surrounding:

  • allegations of irregular payments made by the Chief Executive Officer, Dr Dan Matjila, which now appear not to have been investigated thoroughly, following the leaking of an “internal audit” report [see here]; and
  • questionable investments, or potential investments, in inter alia Ayo Technology Solutions Limited, Sagarmatha Technologies Limited, Steinhoff International Holdings N.V. and VBS Mutual Bank.

I have, on several occasions in the past [see here and here], requested the Chairperson of the Standing Committee on Finance, Yunus Carrim, to schedule a hearing on the meltdown at the PIC.

My last request on 29 April 2018 suggested that in view of the number, and complexity of the issues, that the special hearing be scheduled for a full-day in Parliament

However, my requests have been rejected and the finance committee has effectively turned a blind eye to the meltdown at the PIC.

I will, therefore, as a last resort write to the Chairperson of the Standing Committee on Public Accounts, Themba Godi, requesting him to schedule a hearing on the meltdown at the PIC.

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PIC does a stunning “about turn” on transparency

The National Treasury, Public Investment Corporation and Government Employees Pension Fund have done a stunning “about turn” and decided to oppose a provision aimed at promoting transparency in the Public Investment Corporation Bill [B1-2018], which is currently before Parliament.

The Public Investment Corporation Amendment Bill [B1-2018] is a Private Members Bill, submitted by myself on 17 January 2018, which proposes to amend existing legislation inter alia by inserting the following clause:

Amendment of section 10 of Act 23 of 2004

1. Section 10 of the principal Act is hereby amended by the addition after subsection (2) of the following subsection:
‘‘(3) A report reflecting all investments of deposits, whether listed or unlisted, must annually be—
(a) submitted to the Minister for tabling with the annual report of the department; and
(b) published on the website of the corporation.’’

The Public Investment Corporation Amendment Bill [B1-2018] effectively “legislates” the convention which began on 18 October 2016 when former Deputy-Minister of Finance, Mcebisi Jonas, finally agreed to disclose detailed information about “unlisted investments” made by the Public Investment Corporation.

However, a memorandum outlining the National Treasury, Public Investment Corporation, and the Government Employees Pension Fund’s response to the Public Investment Corporation Amendment Bill [B1-2018], states that:

This proposal is not supported. The PIC as asset manager should not be compelled to disclose information about another entity, i.e. its clients and that are also the assets owners (e.g. the GEPF) without consent.

This is a major setback for the campaign for greater transparency at the Public Investment Corporation, which is responsible for investing R1.928 trillion on behalf of its clients, most importantly the Government Employees Pension Fund.

We now need to know:

• whether the Minister of Finance, Nhlanhla Nene, was consulted and authorized the move to oppose proposals contained in the Public Investment Corporation Amendment Bill [B1-2018] providing for more transparency at the Public Investment Corporation; and
• why the Government Employees Pension Fund, which is responsible for managing the savings of tens of thousands of public sector workers, can explain why it does not want information about investments, made on its behalf by the Public Investment Corporation, to be disclosed to Parliament?

In the end, it is imperative that particulars of investments, especially “unlisted investments”, be disclosed because the expectation that the information will be disclosed, is a major disincentive to “rent seekers”, with political influence, who may want to raid the Public Investment Corporation.

That is why:

• we will submit a parliamentary question probing whether the finance minister was consulted and authorized the department to oppose proposals, contained in the Public Investment Corporation Amendment Bill [B1-2018] providing for more transparency at the Public Investment Corporation; and
• we will not back down and will continue to fight for more transparency so that the Public Investment Corporation does not become a “piggy bank” for the governing party in South Africa.

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Parliament must ‘hold the line’ on Steinhoff

The appearance of Steinhoff executives before the Standing Committee on Finance (SCOF) on Wednesday, 28 March 2018, is an opportunity for Parliament to seek clarity on the proposed financial rewards for Steinhoff board members Heather Sonn, Johan van Zyl and Steve Booysen.
It is simply reckless that the same individuals who were running the company when financial reports were apparently manipulated are now being “rewarded” for fixing the mess they created. The Steinhoff board is under a moral obligation to minimise financial losses to investors, not least of which are the pensioners and members of the Government Employees Pension Fund (GEPF).
The DA will write to the PIC, as a Steinhoff shareholder, to request that they not only hold the Steinhoff board and executives to account but to refuse the obscene financial rewards that have apparently been proposed.
Steinhoff executives have failed to show real remorse on the financial damage that the accounting scandal has inflicted on the pensions of ordinary government employees. No one personifies this defiance than former Steinhoff CEO, Markus Jooste, who will most likely ignore the invitation to appear before the SCOF and other parliamentary committees.
Should Markus Jooste fail to appear before the SCOF on the 28th of March 2018, the DA will request that the SCOF summon him to appear before it.
There are literally millions of South Africans who have been affected by the collapse of Steinhoff and all the relevant persons must be held to account. There is a definite role for the SCOF to play in the process of ensuring that the regulatory regime has not failed Steinhoff investors.

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Finance Minister must clarify if raiding the PIC is Treasury’s ‘Plan B’

The DA calls on Finance Minister, Malusi Gigaba, to clarify if National Treasury’s ‘Plan B’ is to raid the Public Investment Corporation (PIC) in order to save South African Airways (SAA).
National Treasury revealed in Parliament’s Standing Committee on Finance yesterday that the sale of the government’s shares in Telkom might not be the source of the proposed R10 billion bailout for SAA.
For this bailout to go ahead, Mogajane confirmed that National Treasury requires a special Parliamentary sitting before the end of this month to deal with a Special Appropriations Bill.
Mogajane confirmed this in Committee yesterday when he said that National Treasury will urgently approach Parliament to vote on the Bill. He was quoted saying that ‘We will have to appeal to Parliament for the possibility. If there is no possibility, we will have to look to Plan B.’
However, Mogajane’s comments beg the question as to what Plan B in fact is.
SAA’s Corporate Plan for 2017-2022, tabled in August, indicates that it would be securing external funding from the PIC and with less than a fortnight until the end of the month, it seems inevitable that SAA will have little option but to resort to raiding the PIC through a direct loan in order to meet their funding requirements.
This suspect transaction could happen without the PIC first seeking the Government Employees Pension Fund’s (GEPF) approval in terms of the PIC’s extremely broad investment mandate.
This massive R10 billion bailout will only be a short term solution and will not fix the underlying issues at SAA. The airline ultimately needs to be placed under business rescue so that it can be stabilised and private participation can be expanded.