The PIC commission now wants to know how many transactions above R10bn were presented to the board in the last three years.
The investment processes followed by the Public Investment Corporation have again come under scrutiny, this time prompted by the state asset manager’s loan to Steinhoff International’s empowerment partner, the Lancaster Group, the amount of which was reduced in order to bypass board approval.
“I can only speculate,” said the PIC’s Vusumuzi Raseroka , “that the reduction was to enable the transaction to fall within the mandate limit of the investment committee, in terms of the specific product category, which, if exceeded, would have resulted in the transaction requiring full approval from the PIC board.”All transactions above R10 billion need to go to the PIC’s board for approval while those that fall below this threshold can be concluded at investment committee level.
The commission’s terms of reference include assessing the governance structures of the PIC and making recommendations about the investment decision-making framework and the delegation of authority.“If it is common practice to ensure that all your decisions are [for loan applications] below R10 billion, [then] in terms of the terms of reference of this commission, it becomes a governance issue,” said Marcus.
The PIC’s investments have come under the microscope at the commission where, on more than one occasion, witnesses have cited time pressures as an excuse for not applying rigorous governance and investment processes in transactions.
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