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PRETORIA – The Public Investment Corporation (PIC) said it will address a series of media reports, most recently by the city newspaper, in conjunction with a public campaign by the Movement Democratic United (UDM), who questioned the institution's investment processes, its investment decisions and its corporate governance standards, to the point of implying that the CPP has been reckless in the performance of its duties.
The CPP stated that he fulfilled an important function in society; that of investing and managing badets on behalf of the Government Employees Retirement Fund (GEPF), as well as various other funds of great significance to the company, including the Fund of Unemployment Insurance and the Compensation Fund.
Collectively, these funds have grown over the years to exceed just over R.2,1 billion, which equates to about 40% of South Africa's Gross Domestic Product.
These are responsibilities that the CdB feels not only privileged to perform, but also those that it takes very seriously.
The CIP therefore stated that it operated in an environment where its customers, the Shareholder (the Government, through Finance), and various other stakeholders were expecting that it would he discharges his duties with the highest level of integrity.
Misinformed and Sensational Reports
Sensational headlines, poor news badysis and poor understanding by some journalists, have the potential to cause unnecessary panic among retirees, beneficiaries and contributors retreats about the safety of their money, the statement said.
In addition, such reports can potentially lead to systematic risk for the South African economy given the size of the PIC portfolio, as it is the largest investor in the JSE and counts Given the role that the institution plays in
In an badysis of Sunday's news, "What happened to VBS Bank?" – The City Press newspaper made a number of surprising allegations, including:
• The PIC "refused to lend VBS R1.5 billion to force its collapse …"
• "The crash of VBS could have been orchestrated by the PIC and its proxies … "
•" A hostile takeover bid "which was ostensibly" launched "by the PIC and" its agents "to acquire the companies of Bophelo Insurance Group (BIG) , which companies describe as "worthless and indebted".
• "Lebashe and its leaders make millions …" from the PIC investment in GROS
This is the continuation of a persistent trend of similar and questionable reports by the same newspaper – "Risky investment" of 4.3 billion rands from PIC, [21 March 2018] "PIC leaders were purged while other transactions were questioned" [29 April 2018] PIC hit with more claims "[1 July 2018].
Further reading of these reports indicates a lack of understanding of how badet management works, and there is concern about confidential company, board or employee information. are regularly leaked to certain journalists, in the falsified or falsified sense, and presented by some media as fact.
like any other badet manager, inve is in different clbades of badets and in companies of several sectors of the economy.
The PIC is not directly involved in the day-to-day management of the owned companies.
Issuing companies are governed by their own independent boards of directors and operated by their own management teams.
Through its environmental, social and governance (ESG) policies, the CIP takes an active position to promote good corporate governance. companies in which it invests. As an badet manager, the CIP does not seek to exercise a "control function" over the day-to-day operations of the companies held.
When companies are lagging behind on ESG principles, the CIP commits their management and advice to propose strategies to overcome their shortcomings, particularly on empowerment and transformation.
The PIC is an badet manager. It has no mandate, and in fact no investment mandate, to bail out poorly managed banks and, in particular, which has been placed under curatorship by the South African Reserve Bank (SARB).
The allegation that the PIC could have conceived the collapse of VBS is absurd. It is insidious and irrational to claim that the largest badet manager in this country would allow a bank, in which it is itself invested, to collapse.
The BIG is an independent corporation with its own board of directors. It is regulated by the Financial Services Conduct Authority (FSCA) and the company is able to execute its own transactions.
The decision to be exposed to VBS was BIG's own. Currently, the PIC does not sell its own stake in the BIG and the PIC does not finance the purchase of BIG shares by Lebashe Investments. Alleging that the PIC has orchestrated the entire deal – so that Lebashe acquires a stake in the BIG – in favor of "the super-rich black elite band close to the PIC" as claimed by City Press, may to be carried by ignorance, but it is
The implication of Lebashe in BIG
Due to the non-collectability of its funds that were deposited with VBS, the council of BIG administration approached its two shareholders to recapitalize the company. Vele, the majority shareholder with a 70% stake in BIG, has not responded to BIG board's capital application. The PIC, with a 30% stake in BIG, is committed to supporting the activity, pending finalization of the CIP internal processes.
BIG was approached by a number of other potential buyers but these interests dissipated when they were informed that BIG subsidiaries – Bophelo Life Insurance Ltd. and Nzalo Insurance Ltd. – were about to be placed in curatorship by the SARB. The only company that retained its stake in BIG was Lebashe
On June 28, 2018, Vele entered into an agreement with Lebashe for the latter to acquire the 70% Vele shares of BIG for R1, since the company ( Vele) negative net badet value. This enabled the release of 60 million rand to Bophelo Life Insurance and 40 million rand to Nzalo to ensure continued liquidity. Bophelo and Nzalo are both lucrative and lucrative enterprises
There was no "hostility" in this transaction that PIC and SARB supported, in the public interest.
City Press added that "buried on page 9 of the PIC's 2016 annual report" explains the investment logic of the BIG transaction, and the paper concludes with its own master plan: Lebashe and its directors – "the super-rich black elite group close to PIC … [who] can make millions" – are further activated by the PICs that allow VBS to collapse. [19659002] Here are the Facts: The PIC invested in the Bophelo insurance group in 2016. Lebashe is a new company that was established in 2017.
Should we then accept that in 2016, the PIC had foresight prophetic that VBS would be placed in trusteeship in 2018, and that a company registered only in 2017, would be activated by a "favorable treatment" by the PIC, which includes obliging a bank to s & # 39; collapse?
UDM's allegations are regrettable
The Allegations Repeated instances of systemic corruption in PIC by UDM leader Bantu Holomisa are regrettable and lack substance. Earlier this month, the UDM filed an urgent application in the Northern High Court of Gauteng, Pretoria, in which it seeks the suspension of Dr. Daniel Matjila, CEO of PIC.
The IPC intends to oppose this request. advice to that effect. Submitting a letter with new allegations against the CPI and a number of other commercial entities in President Cyril Ramaphosa's office, as the UDM has done now, will not deter the PIC from defending itself before the court to show that UDM's allegations are malicious, patently false and imminently questionable.
The PIC welcomes the lawsuits that Lebashe filed this week against UDM and Holomisa in the High Court of North Gauteng, Pretoria.
Similarly, the allegations against the ICP investment in Harith must be challenged. The PIC is a 30% shareholder in Harith General Partners and 46% in Harith Fund Manager. These investments were made by PIC Corporate, an internal operations fund, and not with the money of its clients.
Hartith was created in 2006 to increase national financial resources to invest in infrastructure, essential for economic development. The CIP provided a starting capital of 25 million rand which was repaid within 24 months. In return, the ICP received equity in the company. From there, the Harith team traveled the continent to raise funds through the Pan-African Infrastructure Development Fund (PAIDF) I and II.
It is important to note that the GEPF made capital commitments directly to PAIDF I and II and not to ICP.
The PAIDF I and II infrastructure projects raised an additional $ 4 billion and created essential jobs, skills development and increased economic growth. PIC has co-invested with Harith in two successful projects – Lanseria Airport and Kelvin Power station. These transactions, including those involving Lebashe (formerly Petratouch), have been subject to PIC's extensive investment process and there is nothing wrong with the commercial relationship between ICP and Harith. Harith's Portfolio Is High Performing
CIP Review and Engagement
The CIP is a publicly-run institution run by professionals, with no adverse findings from the Auditor General in subsequent years, including audits on its investment decisions.
The PIC has generated positive returns that exceed the investment benchmarks of its clients. The PIC's listed equity portfolio has consistently outperformed the JSE SWIX All Share Index and, more importantly, the CIP clients are satisfied with the returns generated.
The compound annual growth rate (CAGR) of the quoted portfolio of the CIP over the past ten and five years was 10.6% and 18.4% respectively, consistently outperforming the benchmark indices of its clients. the largest of PIC's customers, has also grown steadily. Since 1 March 2017, in a low-growth environment, the GEPF portfolio has grown by 7.8% or 134 billion rand to 1,814 billion rand. The GEPF is fully funded by 116%. In simple terms, this means that the Fund has enough badets to cover the liabilities (calculated by the fund's actuaries), in full
The CIP has achieved these investment results while simultaneously contributing to the development goals of the country
Media Investments
The PIC is invested in a number of media institutions through the actions obtained in their holdings – including the publishers of the newspaper City Press . These investments date back some time and range from over 11% to around 25%.
Despite these participations, the ICP respects the freedom of the media as a constitutional imperative. The IPC has never interfered with editorial independence, even when media reports are critical to the institution or its investment decisions.
The recent media attention focuses almost exclusively on a small number of underperforming investments. a message that funds under the direction of the CIP may be eroded, or that the CIP has underperformed as an badet manager.
Journalists may disagree with PIC's investment decisions, but they are not investment specialists. They can not prescribe how the CIP manages its business as an badet manager, particularly in light of the investment performance of the CIP
Transformation drive
The PIC is committed to driving a socio-economic transformation returns for its customers. The PIC began its Black Industrialist development program in different industries, which will be aligned with similar support for Black Asset Managers, Black Private Equity Managers, and Black Managers in real estate. ! function (f, b, e, v, n, t, s) {
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