Selective morality at the PIC Commission amid all the noise


JOHANNESBURG – The PIC is the largest investor on the JSE with 12.5 percent of the market capitalisation of all companies listed on the JSE totalling about R1.6 trillion.

According to the respected researcher Duma Gugubile, the JSE is 97 percent white-owned companies and only 3 percent black-owned companies. He says that even 3 percent is high and if you remove the debt from the black-owned companies it becomes 1.5 percent.

It, therefore, stands to reason that any commission of inquiry into the PIC would mostly interrogate the white-owned companies as they make up almost all of the JSE, in which the Public Investment Corporation (PIC) is the largest investor.

Strangely all the PIC Commission of inquiry has been focussed on black-owned companies in which the PIC invested and not white-owned companies on the JSE.

The PIC is the largest investor in many white-owned corporates that have admitted publicly to fraudulent activities. The most widely reported of these fraudulent corporates is Steinhoff where investors have lost about R200 billion and the PIC alone has lost R24 billion.

This week Tongaat Hulett set to release the forensic report into fraudulent activity where the loss to the company is in the many billions of rand. EOH the ICT company announced recently that it discovered widespread fraud and corruption in government contracts wiping tens of billions of rand off its shareholder value.

In all the above cases, the PIC is the largest shareholder and has lost tens of billions of rand.

The PIC is also the largest investor in many South African companies that have taken pensioners’ money and squandered it offshore. Some of the chief executives of these companies are the highest paid in South Africa today. As an example, Woolworths, where the PIC is the largest investor invested about R20 billion in acquiring David Jones stores in Australia and has all but written off its entire investment.

If one were to calculate the total loss to South African investors from companies failed investments offshore it would amount to almost R500 billion over the last few years. In virtually all these companies, the PIC was and remains the largest shareholder.

Why is it that not a single board member, chairperson or CEO of a JSE listed white-owned company is called to testify at the PIC inquiry given the loss of tens of billions rand of GEPF and pensioners’ funds that the PIC invested in the white corporates.

Why did the commission deliberately ignore the tens of billions of rand lost by white corporates on the JSE?

Why were these companies not investigated?

Was the commission swayed by the established media that focused only on black-owned companies and blatantly ignored the white-owned companies in which the PIC invested R1.6 trillion?

Was this an example of the white-controlled media defending the interest of white corporates with the possible collusion of members of the PIC commission of inquiry?

An examination of the statistics of people who were called to testify at the PIC Inquiry shows the following: Of the 88 people that were called to testify only five of the 17 white people were not PIC employees or consultants. Of the five, none was a CEO from a JSE listed company. Where there was a white CEO, it was of an unlisted company called to testify against the black shareholder of that company.

The evidence leader of the PIC commission, Advocate Jannie Lubbe, decided who to call as witnesses to testify at the PIC commission of inquiry, as each witness opening statement said they were responding to specific questions put to them by Advocate Lubbe.

Additionally, most questions that black executives and PIC employees were asked to respond to, targeted black-owned companies and black executives. These statistics demonstrate evidence of racial bias on the part of the PIC commission.

We have recently seen how the findings of the Sereti commission into the arms deal was overturned as a result of taking a one-sided approach to the arms deal.

Without wanting to pre-judge the PIC commission there is a prima facie case for the PIC commission findings to be taken on review for bias and for being racially driven. There is perhaps a bigger question for the Commission to answer.

Why did the commission treat black companies and black executives differently to white executives and white-owned companies in which the PIC invested?

If this is not answered satisfactorily, it will give credence to those who say the PIC commission was nothing but a racially motivated kangaroo commission designed to destroy black business in South Africa.

This article first appeared in the Business Report Online