The R3.7tn PIC needs independent leadership, not another political appointee: Justice Malala

South Africa's Public Investment Corporation, the $220 billion (about R3.7 trillion) fund managing pensions for 1.2 million civil servants, is now without any executive leadership after a wave of suspensions and resignations, writes Justice Malala. CEO Patrick Dlamini and CIO August van Heerden are suspended, board chair David Masondo has resigned, and Finance Minister Enoch Godongwana's rift with his own deputy sits at the centre of the chaos. Malala argues the real problem is structural: PIC's chair has long been a political appointee rather than an independent professional, ignoring years of recommendations, including from the Mpati Commission, to depoliticise the fund's governance..By Justice Malala.Heard the one about the Public Investment Corp., Africa’s largest investment fund? It’s being referred to as “Hollywood” these days — because everyone is in an acting role.The $220 billion investment giant’s chief executive officer and chief investment officer, Patrick Dlamini and August van Heerden, are both suspended, with juniors temporarily taking their places. At the beginning of last week, two members of the board who were appointed just 10 months ago resigned. Last week, David Masondo, the board chairman responsible for suspending the executives in the first place, also resigned. He was swiftly followed by the last few board holdouts — leaving the company without any executive leadership. South Africa’s Minister of Finance Enoch Godongwana has reportedly fallen out with Masondo, who’s also his deputy.So there’s no captain at the wheel of the company that controls the pension assets of the nation’s 1.2 million civil servants and has significant minority stakes in most of South Africa’s biggest companies. While details of the latest spat remain unclear — it appears to concern the inflated valuation of a firm the fund had invested in, leading to a fight over the spoils — PIC’s problems are almost always because politics dominates the appointments of the chair and the board. This has led to a litany of poor investment decisions and an opaque reporting framework that’s open to abuse.For 25 years, the role of PIC chair has been handed to the deputy minister of finance, by practice until 2021 and by law since then. Appointments to the fund’s board and its executive team seemed to be driven by a political rather than an investment agenda. In the era of President Jacob Zuma between 2009 and 2018, the PIC was accused of being captured by political players.So appalling was the situation that, soon after coming to power in 2018, President Cyril Ramaphosa appointed a commission of inquiry into the investment fund’s operations. In the final report by the commission’s chair, retired Supreme Court of Appeal President Lex Mpati, he made 308 recommendations. Key among them was that the deputy finance minister should no longer chair the board. A qualified, vetted, independent non-executive chair should instead be appointed, he said, and board directors should be selected on merit. The former judge wasn’t alone in suggesting this remedy. Alongside the commission, Ramaphosa also brought in renowned businessman Reuel Khoza to help fix the PIC. When he left, Khoza entreated the government to stop appointing politicians as chairs. All of that advice was ignored.At the heart of the PIC’s problems is the view of the majority party in South Africa’s government of national unity, the ANC, that the fund is a tool of its redistributive economic policies. Politicians or their proxies on the PIC board have interpreted their mandate as license to intervene in investment decisions and pass deals on to their cronies.South African law stipulates that regulators must approve the chair of any financial sector business. Yet, in the case of the PIC, only the president’s word is needed to propel a politician to the most powerful corporate chair on the continent.The Democratic Alliance, the opposition party that’s now the junior partner in South Africa’s governing coalition, has proposed draft legislation aimed at removing political influence from the governance of PIC. The governing ANC, the president and the minister of finance don’t seem to be listening. The ANC’s economic policy chief, the young and energetic Zuko Godlimpi, is being mentioned as a frontrunner to lead a new board. Godlimpi is a deputy minister of trade and industry. His appointment would adhere to the 2021 law that says the finance minister must designate his deputy, or any other deputy minister in the Cabinet’s economic cluster, as the chair of the PIC board..Read more:.Deputy finance minister Masondo faces removal as PIC board chair amid governance crisis.But no matter how strong Godlimpi’s personal credentials are, the governance shortcomings that have bedeviled the PIC for years would at best only be put in abeyance for a few months or years if he was appointed. What’s needed to fix the fund is the courage to insulate its leadership from politics — and the wisdom to put its $220 billion of assets under the stewardship of independent investment professionals. .© 2026 Bloomberg L.P..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. 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The R3.7tn PIC needs independent leadership, not another political appointee: Justice Malala

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