#Nenegate cost PIC over R100bn – Pensioners bear brunt of 9/12

by

Opportunity lost, or in this case the cost of a lost opportunity. While Nenegate will be etched in the memory of all South Africans, the news that the Public Investment Corporation lost more than R100 billion on that fateful day, may engrave this event deeper on government employee’s minds. The group’s CEO said the funds that invest with the PIC encountered this loss after ‘weekend special’ finance minister Des van Rooyen replaced Nhlanhla Nene. These include a R95 billion hit on the Government Employees Pension Fund. And while equity markets may have recovered these losses, and the rand until recently recovered its pre-Nenegate strength, pensioners must ask the question where markets would be had 9/12 not happened. And the opportunity cost will only be felt in years to come, when workers join the pension pay roll. – Stuart Lowman

By Liesl Peyper

Cape Town – The funds that invest money with the Public Investment Corporation (PIC) lost more than R100bn when President Jacob Zuma fired former finance minister Nhlanhla Nene on 9 December 2015, said Daniel Matjila, CEO of the organisation.

David van Rooyen, South Africa's incoming finance minister, left, shakes hands with Jacob Zuma, South Africa's president, during his swearing in ceremony at the Union Buildings in Pretoria, South Africa, on Thursday, Dec. 10, 2015. The rand fell for a sixth day in the longest streak of losses since November 2013, stocks slid and bond prices tumbled the most on record after South African President Jacob Zuma fired Finance Minister Nhlanhla Nene and replaced him with a little-known lawmaker. Photographer: Waldo Swiegers/Bloomberg *** Local Caption *** David van Rooyen; Jacob Zuma
David van Rooyen, South Africa’s ‘weekend special’ finance minister, left, shakes hands with Jacob Zuma, South Africa’s president, during his swearing in ceremony at the Union Buildings in Pretoria. Photographer: Waldo Swiegers/Bloomberg

The PIC appeared before the standing committee on finance on Tuesday, responding to questions from MPs about its investment mandates and details about the entities and companies it invests in.

DA shadow minister of finance, David Maynier, asked the PIC what impact the events of the so-called “9/12” – when Nene was briefly replaced with Des van Rooyen as finance minister – had on the assets it manages.

According to Matjila, the Government Employees Pension Fund lost R95bn, the UIF lost R7bn, the Compensation Fund lost R3bn, while other funds forbore R1.2bn. “However, beyond two days we’ve seen a significant recovery,” Matjila added.

Maynier said in a statement that the PIC’s admission is a stark reminder of how much damage was done to pensioners’ savings. “It serves as proof that President Jacob Zuma was dead wrong when he claimed the effect of his disastrous decisions was ‘exaggerated’ in South Africa.”

In January this year, Zuma said the markets overreacted when he replaced Nene and people “exaggerated” the situation. He insisted that it had been the right decision to appoint Van Rooyen. – Fin24

Source: http://www.fin24.com/Economy/pic-lost-over-r100bn-when-zuma-fired-nene-ceo-20160510

Visited 199 times, 2 visit(s) today

BizNews