PIC CEO back at work three weeks after being suspended

Patrick Dlamini is to return to his job as chief executive of the Public Investment Corporation (PIC) after the Gauteng High Court in Pretoria set aside his suspension. Dlamini has been out of office for the past three weeks.

The court ruling on Tuesday effectively nullified the PIC board’s decision to suspend the CEO of the embattled asset manager amid allegations of impropriety detailed in a whistleblower report submitted earlier this year.

It said the board lacked authority in its decision.

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Section 6 of the Public Investment Corporation Act provides that the minister of finance, in consultation with cabinet, appoints the CEO.

The board’s role is limited to selecting and recommending a suitable candidate.

The PIC’s Delegations of Authority require that any suspension of the CEO be recommended by the Human Resources and Remuneration Committee, initiated by the chair, and approved by the minister in consultation with cabinet.

“None of these prerequisites were met. The board acted unilaterally, without ministerial approval and in disregard of its own policies,” the 10-page judgement stated.

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“The suspension was, therefore, ultra vires and invalid.”

Collision course

Dlamini’s premature suspension was one of the issues that placed Finance Minister Enoch Godongwana on a collision course with his deputy and former PIC chair, David Masondo.

Disagreements over governance at the R3.6 trillion asset manager ultimately led to the resignation of the entire board, with a new one appointed last week.

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In its attempt to be added as an intervening party in the legal challenge, Public Interest South Africa argued that the PIC board derived its authority to suspend Dlamini from the organisation’s whistleblower policy.

But the court ruled the argument by the lobby group was insufficient.

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“Whistleblower protections safeguard whistleblowers from retaliation. They do not, however, confer powers of suspension on the board.”

“The board’s reliance on whistleblower protections cannot cure its lack of authority,” the court added.

The PIC board was ordered to pay Dlamini’s legal costs.

Godongwana reacts to court ruling

In a written statement issued after the judgment, Godongwana said the ruling vindicated the actions taken by National Treasury and cabinet to restore governance at South Africa’s largest asset management institution.

He said the intervention had been both “good and necessary”, triggered in part by the hasty suspension of the CEO without the required consultation or due process.

“As the country’s largest asset manager and the custodian of a substantial portion of public sector retirement funds, trust in its governance is of systemic importance,” Godongwana said.

Read: PIC turmoil highlights need for independent board appointments

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