The Democratic Alliance (DA) will write to the Minister of Finance to obtain details of the ANC election manifesto statements that the party intends to change the mandate of the South African Reserve Bank (SARB) as well as to prescribe to financial institutions where they must invest the money they hold in trust on behalf of bank depositors, pension and retirement fund contributors, pensioners and insurance policyholders.
The imposition of prescribed assets is exactly what the apartheid regime resorted to in desperation when they could not raise capital in the international markets. Now the ANC is to resort to the same annexation of private funds as international markets hold back on making capital available to South Africa.
Instead of announcing bold new initiatives to stimulate economic growth and job creation, the ANC has decided to simply “expropriate” ordinary South Africans’ savings to try to save bloated and corrupt State-Owned Entities such as SAA and ESKOM.
Clearly President Cyril Ramaphosa has not had the backbone to stand up to the SACP/COSATU and has capitulated to their demands for these changes to the SARB mandate and to imposing a prescribed asset regime.
What these changes will undoubtedly bring about will be to:
- Make the South African Reserve Bank a battleground as the destructive forces in the ANC and its ally the EFF push the agenda to change the SARB mandate. We urge the SARB Governor to withstand the coming onslaught and to continue to focus on the existing SARB mandate.
- Result in further downgrades by international ratings agencies no matter how much charm and spin President Cyril Ramaphosa puts on these economically destructive changes.
- Drive away foreign direct investment,
The losers as a result of these very foolish moves by the ANC is the will be to create more unemployment and misery for the majority of South Africans. There can be little doubt that unemployment numbers in 2019 will sky rocket way beyond the 10 million mark.
We welcome the news that President Cyril Ramaphosa has appointed a Commission of Inquiry, in terms of Section 84(2)(f) of the Constitution, into allegations of impropriety at the Public Investment Corporation.
However, the terms of reference limit the scope of the inquiry to the period between 01 January 2015 and 31 August 2018, which may have the effect of excluding a number of the questionable investments from scrutiny, including the investment in Independent Media, which was concluded on 16 August 2013, by the Public Investment Corporation.
We think there are few things that will terrify the governing party more than a full-scale independent inquiry into the Public Investment Corporation.
One of the first tests of the new Minister of Finance, Tito Mboweni, is whether he will support the disclosure of detailed information about R70 billion worth of investments made by the Public Investment Corporation in its “unlisted investment portfolio” in 2017/18.
The Public Investment Corporation has disclosed detailed information about investments in its “unlisted investment portfolio” for the past two years before the Medium-Term Budget Policy Statement has been presented in Parliament.
However, this year:
- no disclosure of detailed information has been made by the Public Investment Corporation about investments in its “unlisted investment portfolio” during 2017/18;
- no provision has been made for hearings on the Public Investment Corporation’s 2017/18 annual report and annual financial statements by the finance committee in Parliament; and
- there seems to have been an “about turn” when it comes to greater transparency at the Public Investment Corporation.
The fact is that National Treasury is now opposing provisions that would promote greater transparency that are contained in my Private Members Bill, entitled the Public Investment Corporation Amendment Bill [B1-2018], which is before the finance committee in Parliament.
We have to ensure that detailed information about investments, especially investments in the “unlisted investment portfolio”, is disclosed, because it serves as a major disincentive to “rent-seekers” with political influence who want to raid the Public Investment Corporation.
I will, therefore, write to Dr Dan Matjila, Chief Executive Officer of the Public Investment Corporation, requesting him to disclose detailed information about the R70 billion worth of investments made by the Public Investment Corporation in its “unlisted investment portfolio” in 2017/18.
And I have already written to Yunus Carrim, Chairperson of the Standing Committee on Finance, requesting him to schedule a hearing with the Public Investment Corporation during the fourth term of Parliament.
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.
The Minister of Finance, Nhlanhla Nene, strongly denies that he ever acted inappropriately when it comes to any investments, including any investments involving his son, Siyabonga Nene, made by the Public Investment Corporation.
However, the allegations surrounding a Public Investment Corporation investment in S&S Refinarias, which reportedly included a US$ 1.7 million “referral fee”, which may have benefited Siyabonga Nene, are serious, given the fact that in terms of Section 96(2)(b) of the Constitution ministers may not:
- “…expose themselves to any situation involving the risk of a conflict between their official responsibilities and private interests”.
I will, therefore, request the Public Protector, Advocate Busisiwe Mkhwebane, to investigate this matter, in terms of Section 4 of the Executive Members Ethics Act (No. 82 of 1998), in order to determine whether there was any breach of the code of ethics, which is applicable to ministers, and to deputy ministers, in South Africa.
The Leader of the Economic Freedom Fighters, Julius Malema, has conducted what appears to be a smear campaign against the Minister of Finance, Nhlanhla Nene, alleging that he has played a role in state capture in South Africa.
Today, the minister confirmed he had met the Guptas, and although he seems to have exercised poor judgement meeting the Guptas, knowing that they were under investigation by National Treasury for their role in the Estina Dairy Project, he strongly denied he had acted improperly, as deputy finance minister and chairperson of the Public Investment Corporation.
Rather than standing on the sidelines sabre rattling, Mr Malema should now have the courage to appear under oath and give evidence relating to his allegations so that they can be properly investigated by the Zondo Commission.
The Democratic Alliance (DA) welcomes the decision taken by President Cyril Ramaphosa to establish a Commission of Inquiry into ongoing corporate governance challenges and waning public trust in the Public Investment Corporation (PIC).
However, there is a risk that one of the Inquiry’s terms of reference, which advocates for “possible changes to the PICs founding legislation”, may result in important legislation, aimed at strengthening governance and boosting transparency at the PIC, being delayed in Parliament.
I will request the Chair of the Standing Committee on Finance, Yunus Carrim, that work on the Public Investment Corporation Amendment Bill [B1-2018] (Private Members Bill), or the Public Investment Corporation Amendment Bill (Committee Bill), should proceed and get passed before parliament rises.
The Commission of Inquiry must complement the work of Parliament in strengthening the PIC rather than weaken it.
The corruption investigation into VBS executives and Vele investments, following charges that the DA laid on Friday, must be expanded to include two Public Investment Corporation officials, Paul Magula and Ernest Nesane, who were allegedly paid to keep silent while the collapsed bank was being looted.
Media reports indicate that, while acting on behalf of the PIC representatives as non-Executive Directors on the VBS Board, Magula and Nesane received payments in excess of R5 million for ‘loans, mortgages, salaries and a shelf company’.
The latest revelation is an indictment on the PIC’s poor investment choices and lax internal control mechanisms which failed to detect that their representatives at VBS had ‘been bought’ and could no longer be trusted with fiduciary responsibilities.
In the interests of justice, all those implicated in VBS bank looting must not only face criminal charges in terms of the Section 3 of the Prevention and Combating of Corrupt Activities Act but they also must be made to pay back all the money they received illegitimately.
It is unacceptable that while poor South Africans who banked with VBS are now struggling to withdraw their hard earned money, individuals who corruptly benefited from VBS sleaze are living comfortably from the proceeds of their ill-gotten wealth.
The DA looks forward to a timely conclusion of the SAPS investigation into VBS corruption and the beginning of the prosecution process of all those implicated, as an essential first step in restoring the tainted image of the country’s financial services sector.
The DA welcomes the South African Reserve Bank’s announcement that VBS Mutual Bank’s clients (individuals, burial societies and stokvels) will, from Friday, be able to withdraw up to R100 000 over a period of three years through a process that will be facilitated by Nedbank.
Although we are pleased that ordinary citizens who deposited money with VBS will get their money back, this will not be enough to reverse the problems that were caused by the apparent looting of money at the bank.
Clients will be able to withdraw all their funds or leave them with Nedbank, but will need to have withdrawn all the money within three years.
However, we are concerned that monies deposited by the Public Investment Corporation (PIC) and several municipalities with VBS may not be recovered.
If these public monies are not recovered, state employees and citizens of various municipalities will be the hardest hit. The PIC manages the pension funds of millions of state employees and their savings have now been placed at risk.
Citizens of the affected municipalities will also be deprived of basic services should this money not be retrieved and this shows once more that corruption is not a victimless crime.
The DA will continue to hold those who loot public funds accountable and will not tolerate corruption.
The allegation that the Minister of Cooperative Government and Traditional Affairs, Dr Zweli Mkhize, received a R4.5 million “kickback” in return for facilitating a R210 million loan from the Public Investment Corporation must be probed by Parliament.
This is just one of several questionable investments made by the Public Investment Corporation, which up until now have included Ayo Technology Solutions Limited, Sagarmatha Technologies Limited, Steinhoff International Holdings N.V. and VBS Mutual Bank.
The fact is that hardly a day goes by without a new scandal surrounding questionable investments emerging at the Public Investment Corporation.
However, the finance committee has proved completely ineffective at probing the questionable investments made by the Public Investment Corporation.
We are prohibited from cross examining senior executives and simply do not receive straight answers to straight questions put to the Public Investment Corporation.
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 probing allegations surrounding irregular payments and questionable investments at the Public Investment Corporation.
The hearing should probe the allegation that the Minister of Cooperative Government and Traditional Affairs, Dr Zweli Mkhize, received a R4.5 million “kickback” for facilitating a R210 million loan from the Public Investment Corporation.
However, it should also probe:
- 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; and
- questionable investments and loans in inter alia Ayo Technology Solutions Limited, Sagarmatha Technologies Limited, Steinhoff International Holdings N.V. and VBS Mutual Bank.