Billions Lost in PIC’s Failed Isibaya Investments

Statement by Andrew Bateman MP – DA Deputy Spokesperson on Appropriations:

The Democratic Alliance will probe how the Public Investment Corporation (PIC) has lost billions set aside for government pensions and other public purposes through reckless investments in its “Isibaya Fund” – investments which have lost all of their value in some cases.

A prime example is the Daybreak chicken farm investment which is now worth a small fraction of the PIC’s investment of approximately R2 billion, but there are many others.

The PIC manages about R3 trillion on behalf of government employees, and every rand lost to negligence or corruption is money that should be securing the retirement of teachers, nurses and police officers.

To probe this, the DA has submitted detailed parliamentary questions to the Minister of Finance.

The Minister has already confirmed the losses on each investment, but what remains to be investigated is why these deals were approved, who benefited, and who should be held to account.

Our questions ask the Minister to disclose, for each transaction:

• The investment rationale, the developmental case made for it, and the returns projected to decision-makers;
• The due diligence done, the advisers and legal firms involved, and whether known risks were overlooked;
• Which executives, investment committee members and board members approved them, whether conflicts of interest were declared, and whether any warnings or dissent were raised;
• Who the shareholders and beneficiaries were, and whether politically connected persons benefited;
• How the investment was monitored, whether PIC-appointed directors did their job, and whether further funding was advanced despite clear signs of distress;
• Whether, in any of the investigations underway, misconduct has been found, whether matters were referred to the Hawks, SIU, NPA or FSCA, whether civil recovery has begun, and whether anyone earned fees, bonuses or commissions off these deals.

The Mpati Commission has already exposed deep governance failures at the PIC, yet there has been inadequate accountability for those responsible.

The DA will not rest until the PIC Act has been amended to free the PIC from political control by reforming the process by which the board and chairperson are selected.