Chairman of South Africa’s biggest asset manager calls it quits

South Africa’s deputy finance minister quit as the chairman of a state-owned firm that oversees R3.5 trillion of government pensions, days before he faced being removed from the post.

“After careful reflection, I have decided to resign as chairperson of the board of the Public Investment Corp.,” David Masondo said in a statement on Thursday.

“I do so in the interests of the Republic of South Africa, the continued stability of the PIC, and the confidence of the millions of South Africans whose savings are entrusted to this institution.”

Masondo’s exit compounds perceptions of a crisis at Africa’s biggest fund manager. It comes a week after he suspended PIC CEO Patrick Dlamini pending the outcome of an investigation into governance and procurement processes at the fund.

At least six non-executive directors of the PIC’s 11-member board have resigned in the past week. 

Dlamini’s dismissal exposed a rift between Masondo and his boss, Finance Minister Enoch Godongwana, who said he wasn’t consulted about the CEO’s suspension by the PIC board.

Godongwana, this week, called a board meeting for July 27, at which Masondo and the PIC’s non-executive directors potentially faced removal. 

Masondo said he and the board acted collectively in good faith, based on sound legal advice and in accordance with the principles of good governance, and that he remained confident that the decisions they took were correct.

“The minister of finance has recognised that, in performing my duties, I acted with integrity and in good faith,” he said.

“Throughout my tenure, I sought to discharge my fiduciary responsibilities without fear or favour. In this instance, my actions were guided by the imperative to protect and safeguard the funds entrusted to the PIC.”

The PIC’s huge asset base — with significant minority stakes in most of South Africa’s biggest companies — gives it considerable influence over the country’s corporate landscape.

It has significant minority holdings in most of the country’s top companies, including more than a fifth of technology giant Naspers and telecommunications firm MTN, and about 15% of banks Absa, FirstRand, Investec, Capitec and Standard Bank.