Biggest Africa Fund Manager Hurt by Allegations, Probe Hears

(Bloomberg) -- Allegations of financial wrongdoing at Africa’s biggest fund manager created a fearful work environment, with employees being disgruntled, suspicious and unproductive, a former board member told an inquiry.

Before the claims by an anonymous whistle-blower, South Africa’s Public Investment Corp., which has more than 2 trillion rand ($144 billion) in assets, had been a stable and productive organization with a unified board that could debate professionally at scheduled meetings, Dudu Hlatshwayo told the hearing into the allegations Tuesday in the capital, Pretoria. After the emails were leaked, many meetings were cancelled at short notice, and those that were held focused on the leaks, she said.

Hlatshwayo, who joined the board in late 2013, is among the nine directors who resigned en masse earlier this month from the PIC, which invests on behalf of the Government Employees Pension Fund. Allegations against some of them “have been unbearable to us as individuals and have undoubtedly had a negative impact on our professional integrity,” they said in a letter to Finance Minister Tito Mboweni. They offered to stay on until a new board is found.

The board only offered to step down after Mboweni instructed it to do so, Hlatshwayo said.

President Cyril Ramaphosa set up the commission in October after the whistle-blower made the allegations. Chaired by former Supreme Court of Appeal President Judge Lex Mpati, its job is to investigate and make recommendations on the validity of the accusations. It will also rule on whether any legislation, PIC policy or contractual obligations have been broken and resulted in undue benefit for any director, employee or their family members.

In the past year, half of the PIC’s executive committee has been suspended or resigned, including Chief Executive Officer Daniel Matjila.

©2019 Bloomberg L.P.