South African Deputy Minister Quits as $220 Billion Fund’s Chair
(Bloomberg) — South Africa’s deputy finance minister resigned as chairman of a state-owned firm that oversees $220 billion in state pensions, days before he faced impeachment.
“After careful consideration, I have decided to resign as chairman of the board of Public Investment Corp.,” David Masondo said in a statement Thursday. he said. “I do this in the interests of the Republic of South Africa, the stability of the PIC and the trust of the millions of South Africans whose savings are entrusted to this institution.”
Masondo’s departure increased the perception of crisis at Africa’s largest fund manager. This comes a week after PIC suspended Chief Executive Patrick Dlamini pending the outcome of an investigation into governance and procurement processes at the fund.
At least six non-executive members of the PIC’s 11-member board resigned last week.
Dlamini’s sacking revealed a rift between Masondo and his boss, Finance Minister Enoch Godongwana, who said he was not consulted by the PIC board about the CEO’s sacking.
Godongwana this week called a board meeting on July 27 at which Masondo and PIC’s non-executive directors would face the risk of being removed.
Masondo said he and the board collectively acted in good faith, based on sound legal advice and in accordance with the principles of good governance, and he was confident that the decisions they made were correct.
“The finance minister acknowledged that I acted with integrity and good faith in the discharge of my duties,” he said. “Throughout my term of office, I have sought to discharge my fiduciary responsibilities without fear or favor. In this instance, my actions were guided by the obligation to protect and safeguard the funds entrusted to the PIC.”
The PIC’s massive asset base, which holds significant minority stakes in many of South Africa’s largest companies, gives it significant influence over the country’s corporate landscape.
Technology giant Naspers Ltd. and more than a fifth of telecommunications company MTN Group Ltd. and Absa Group Ltd., FirstRand Ltd., Investec Plc, Capitec Ltd. and Standard Bank Group Ltd. It holds significant minority stakes in many of the country’s leading companies, including approximately 15% of its banks.
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(Updated with comments from the deputy finance minister in the sixth paragraph.)
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