Commissions Act, 1947 (Act No. 8 of 1947)

Proclamations

Terms of Reference Commission of Inquiry into Allegations of Impropriety regarding Public Investment Corporation

Commission of Inquiry into allegations of impropriety regarding the Public Investment Corporation
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WHEREAS the Public Investment Corporation SOC Limited (herein called the PIC) was established by the Public Investment Corporation Act, 2004 (herein called the PIC Act), is a state owned company under the Companies Act, 2008, and a government business enterprise under the Public Finance Management Act, 1999 and licensed under the Financial Advisory and Intermediary Services Act, 2002 as a financial services provider;

 

AND WHEREAS the PIC is the investment manager for the Government Employees Pension Fund (herein called the GEPF), the pension fund for public service employees, as well as for certain other government institutions and private persons, and given the size of investments it manages, which play a significant role in socio-economic development in South Africa;

 

AND WHEREAS the Government is the guarantor of last resort for the obligations of the GEPF, a failure of the PIC or a failure of any significant investments for the GEPF, exposes the Government to substantial financial vulnerability;

 

AND WHEREAS the PIC must be managed in accordance with the highest standard of ethics, integrity and efficiency, so that its governance and investment decisions are beyond reproach and the investment of funds on behalf of members of the GEPF, in particular, are adequately safeguarded;

 

AND WHEREAS there are persistent and continued negative reports about alleged improprieties regarding investments by the PIC and the conduct of certain former and current office bearers and employees of the PIC, as well as about the effective functioning of its Board which have given rise to negative perceptions of the PIC;

 

AND WHEREAS the veracity of alleged improprieties must be investigated properly and possible corrective measures may be required in order to stabilise and restore confidence in the PIC and to ensure its sound financial management,

 

THEREFORE a Commission of Inquiry is hereby appointed in terms of section 84(2)(f) of the Constitution of the Republic of South Africa, 1996.

 

1. The Commission must enquire into, make findings, report on and make recommendations on the following:

 

1.1.Whether any alleged impropriety regarding investment decisions by the PIC in media reports in 2017 and 2018 contravened any legislation, PIC policy or contractual obligations and resulted in any undue benefit for any PIC director, or employee or any associate or family member of any PIC director or employee at the time;

 

1.2. Whether any findings of impropriety following the investigation in terms of paragraph 1.1 resulted from ineffective governance and/or functioning by the PIC Board;

 

1.3. Whether any PIC director or employee used his or her position or privileges, or confidential information for personal gain or to improperly benefit another person;

 

1.4 Whether any legislation or PIC policies concerning the reporting of alleged corrupt activities and the protection of whistle -blowers were not complied with in respect of any alleged impropriety referred to in paragraph 1.1;

 

1.5. Whether the approved minutes of the PIC Board regarding discussions of any alleged impropriety referred to in paragraph 1.1 are an accurate reflection of the discussions and the Board's resolution regarding the matters and whether the minutes were altered to unduly protect persons implicated and, if so, to make a finding on the person/s responsible for the alterations;

 

1.6. Whether all the investigations into the leakage of information and the source of emails containing allegations against senior executives of the PIC in media reports in 2017 and 2018, while not thoroughly investigating the substance of these allegations, were justified;

 

1.7. Whether any employees of the PIC obtained access to emails and other information of the PIC, contrary to the internal policies of the PIC or legislation;

 

1.8. Whether any confidential information of the PIC was disclosed to third parties without the requisite authority or in accordance with the Protected Disclosures Act, 2000, and, if so, to advise whether such disclosure impacted negatively on the integrity and effective functioning of the PIC;

 

1.9. Whether the PIC has adequate measures in place to ensure that confidential information is not disclosed and, if not, to advise on measures that should be introduced;

 

1.10. Whether measures that the PIC has in place are adequate to ensure that investments do not unduly favour or discriminate against—
1.10.1. a domestic prominent influential person (as defined in section 1 of the Financial Intelligence Centre Act, 2001);
1.10.2. an immediate family member (as contemplated in section 21H(2) of the Financial Intelligence Centre Act, 2001) of a domestic prominent influential person; and
1.10.3. known close associates of a domestic prominent influential person;

 

1.11. Whether there are discriminatory practices with regard to remuneration and performance awards of PIC employees;

 

1 12. Whether any senior executive of the PIC victimised any PIC employees;

 

1.13. Whether mutual separation agreements concluded in 2017 and 2018 with senior executives of the PIC complied with internal policies of the PIC and whether pay -outs made for this purpose were prudent;

 

1 14. Whether the PIC followed due and proper process in 2017 and 2018 in the appointment of senior executive heads and senior managers, whether on permanent or fixed-term contracts;

 

1.15. Whether the current governance and operating model of the PIC, including the composition of the Board, is the most effective and efficient model and, if not, to make recommendations on the most suitable governance and operational model for the PIC for the future;

 

1.16. Whether, considering its findings, it is necessary to make changes to the PIC Act, the PIC Memorandum of Incorporation in terms of the Companies Act, 2008, and the investment decision -making framework of the PIC, as well as the delegation of authority for the framework (if any) and, if so, to advise on the possible changes.

 

1.17 Whether the PIC has given effect to its clients' mandates as required by the Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002) and any applicable legislation.

[Paragraph 1.17 inserted by section 2 of Proclamation No. 21 of 2019, GG 42384, dated 4 April 2019]

 

2. The Commission must, in its enquiry for the purpose of its findings, report and recommendations, consider the period 1 January 2015 to 31 August 2018.

 

3. The Commission must submit—
3.1. an interim report to the President by not later than 15 February 2019; and

[Paragraph 3.1 substituted by section 2 of Proclamation No. 47 of 2019, GG 42596, dated 26 July 2019]

3.2. a final report by not later than 15 December 2019.

[Paragraph 3.2 substituted by section 2 of Proclamation No. 55 of 2019, GG 42798, dated 25 October 2019]

 

4. The Commission may, if necessary, investigate and make findings and recommendations on, any other matter regarding the PIC, regardless of when it is alleged to have occurred, on condition that such other investigations, findings and recommendations do not cause any delay in the submission of the reports on the applicable dates referred to in paragraph 3.

 

5. The Commission may request the advice or views of any organ of state or any other person or organisation that the Commission is of the opinion may be able to assist.

 

6. In order to—
6.1 enable the Commission to conduct its work meaningfully and effectively; and
6.2. facilitate the gathering of evidence, by conferring on the Commission such powers as are necessary to secure the attendance of witnesses and to compel the production of documents and any other required information, including the power to enter and search premises, regulations must be made under the Commissions Act, 1947, which will apply to the Commission.