The Financial Sector Conduct Authority (FSCA) of South Africa announced late Tuesday that it has launched an investigation into the Public Investment Corporation (PIC).
As the largest asset manager in Africa, the PIC manages around R3.7 trillion in assets and functions under the regulatory oversight of the FSCA, holding a license as an authorized Financial Services Provider (FSP).
This announcement comes shortly after PIC’s CEO, Patrick Dlamini, was placed on precautionary suspension by the PIC board on Monday due to whistleblower allegations of misconduct. The board stated that this decision is in accordance with its whistleblower policy.
Read: PIC CEO Patrick Dlamini suspended amid whistleblower allegations
“The FSCA is aware of the recent developments at the PIC and the allegations made in the media regarding whistleblower claims and the CEO’s suspension,” the financial regulator noted.
“Given these circumstances, the FSCA has decided to investigate these matters at the PIC in line with Section 135 of the Financial Sector Regulation Act.”
“The PIC functions as an authorized FSP, and is thus subject to FSCA regulation,” it added.
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“The recent developments at the PIC have raised significant concerns for the FSCA, particularly regarding governance, leadership stability, transparency, and the potential impact on the integrity and trust in one of South Africa’s key financial institutions,” it further stated.
The PIC claims to be the largest institutional investor in South Africa’s listed equities, holding over 10% of the JSE’s market capitalization.
Read: PIC rocked by governance woes … again
“The PIC holds an essential and unique position within South Africa’s financial ecosystem,” the FSCA emphasized.
“As the nation’s largest asset manager and custodian of substantial public sector savings, it has an elevated responsibility to uphold the highest standards of governance, integrity, accountability, and conduct,” it remarked.
“The events over the past months have raised serious questions about whether these standards are being upheld consistently,” the FSCA indicated.
This is not the first time the FSCA has investigated the PIC or its executives. Previous inquiries included the VBS scandal, leading to the debarment of two former PIC executives, as well as reviews of funding arrangements with Independent News & Media and JSE-listed Ayo Technology Solutions, following recommendations from the Mpati Commission in 2020.
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‘Precautionary suspension’
In response to Dlamini’s suspension on Monday, PIC spokesperson Sipho Mofokeng reiterated that the action is precautionary and “does not imply any findings or indications of wrongdoing on the CEO’s part.”
Mofokeng stated that the suspension is intended to provide Dlamini “adequate space and time” to address the allegations.
“In line with relevant labor laws and internal PIC procedures, the precautionary suspension is meant to ensure a fair, objective, and independent investigation into the claims,” he explained.
Earlier this year, Dlamini initiated an internal review of the PIC’s unlisted investments, which brought to light concerns about the performance of specific investments.
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