Deputy Minister David Masondo on outcome of PIC Chairperson town hall with PIC Staff

The Chairperson of the Public Investment Corporation (PIC) Board, Dr David Masondo, held an extensive Town Hall meeting with employees on Thursday, 16th July. The Chairperson chose to prioritise robust, open engagement with staff rather than respond to the misinformation that has been circulating about the PIC this past week.

In a candid engagement, the Chairperson also invited employees to ask difficult questions, committing to answer them honestly wherever possible and explaining that where legal processes prevented fuller disclosure, he would say so openly rather than speculate. The discussion covered the precautionary suspension of the Chief Executive Officer, the Financial Sector Conduct Authority's (FSCA) inquiry, leadership changes, governance processes and the Board's responsibility to safeguard one of South Africa's most important public institutions.

Precautionary suspension of the CEO

Dr Masondo stressed that a pre-cautionary suspension is not a finding of guilt and should never be interpreted as one.He explained that the Board sought and received independent legal advice from Senior Counsel before taking its decision. Acting on that advice, the Board concluded that a precautionary suspension was necessary to protect the integrity of the investigation, preserve the fairness of the process and ensure that the allegations could be tested independently.

"The alternative," the Chairperson explained, "would have been for the Board to ignore serious allegations placed before it. A Board entrusted with the retirement savings of millions of South Africans cannot selectively apply its governance responsibilities. Had we failed to act, we ourselves would rightly have been found wanting."

Unlisted portfolio

The Chairperson was also asked questions about the unlisted portfolio, which has invited significant public scrutiny. Many of its transactions examined by the Mpati Commission originated from legacy investments made before the tenure of the current leadership. The PIC currently has investments in 150 unlisted companies, of which 39 legacy investments are undergoing turnaround or distress-management processes.

While these investments have attracted considerable public attention, they represent a relatively small portion of the PIC's portfolio, yet significant in rands terms. The entire unlisted portfolio constitutes 4.5% of the PIC's Assets Under Management, with distressed and turnaround investments accounting for only 1.7% of the unlisted portfolio and less than 0.1% of the PIC's total investments. Despite these challenges, the PIC has recovered R10 billion of its R19 billion debt book and is pursuing legal processes to recover the remaining R9.3 billion. The portfolio has also continued to generate value, expanding by 3.6% during the financial year ended March 2026, while the 2022 Unlisted Investments Mandate delivered a 16% internal rate of return, outperforming its benchmark. This is a positive trajectory and it is a sign of the commitment and expertise of PIC professionals who continue to work tirelessly to build an institution that is an integral part of South Africa’s economy.

With increasing improving within the PIC, the GEPF  its largest client, has on 6 July 2026, has uplifted the previously imposed moratorium on direct property portfolio.

FSCA's inquiry

The Chairperson clarified that the Board was not aware that the FSCA had previously requested from management documentation relating to the whistleblower matter, and recognised what seems to have miscommunication and misunderstanding between the PIC management and FSCA.

He explained that those earlier requests had not been brought to the attention of either the Board or its Chairperson. Upon becoming aware of the matter through the Authority's subsequent correspondence, the Chairperson immediately responded, furnished the requested documentation and committed the Board's full cooperation with the inquiry.

He welcomed the regulator's oversight, describing independent scrutiny as an essential feature of healthy institutions and an opportunity to further strengthen governance systems.

Acting Chief Investment Officer Position

The Chairperson clarified that the circumstances differed fundamentally from those relating to the CEO. He explained that there was no suspension of the Acting Chief Investment Officer, as Mr August van Heerden was serving in an acting capacity, not as a permanently appointed CIO.

The Chairperson noted that, under the Investment Management Agreement governing the PIC's relationship with its largest client, the Government Employees Pension Fund (GEPF), the appointment of key investment personnel requires the client's consent. The Board was informed that the GEPF Board did not approve Mr van Heerden's appointment as Acting Chief Investment Officer and therefore did not recognise him as a Key Person under the investment mandate.

"The PIC could not simply disregard the position of its largest client," the Chairperson explained. "To have done so would have exposed the Corporation to regulatory and contractual risk and would have been inconsistent with our fiduciary obligations."

He emphasised that the Board's responsibility was to ensure that the Corporation remained fully compliant with both its contractual obligations and applicable governance requirements.  

The Chairperson further explained that Mr Leon Smit was subsequently appointed as Acting Chief Investment Officer with the necessary support of the GEPF, ensuring continuity of investment leadership while maintaining full compliance with the Investment Management Agreement.

He described Mr Smit as one of the PIC's most experienced investment professionals, bringing more than three decades of experience in fixed income, treasury and portfolio management, including acting in many occasions as the CIO.

The Chairperson also reflected on his decision later adopted by the Board to refer the PwC forensic report to the Special Investigating Unit (SIU), explaining that this too followed legal advice received the Chairperson received. Once that advice came to his attention after being withheld from the Chair, the Board acted without hesitation because the law had to guide its actions.

Throughout the Town Hall, Dr Masondo returned to a single principle: institutions earn public trust by following evidence, respecting due process and acting consistently whenever governance concerns arise.

He thanked employees for their professionalism during a challenging period and assured them that the PIC remains operationally stable, investment mandates continue uninterrupted, leadership continuity has been secured, and the Corporation's fiduciary responsibility to millions of public servants remains unchanged.

Concluding the engagement, the Chairperson encouraged staff not to allow speculation or misinformation to define the institution they know from their daily work.