Deputy Finance Minister Mcebisi Jonas acknowledged that there are \u201chuge problems\u201d with state-owned enterprises (SOEs) and that government needs to be \u201cmore hesitant\u201d when considering to invest in these entities.<\/p>\n
Jonas was attending a meeting of the Standing Committee on Finance on Tuesday during which the Public Investment Corporation (PIC) and the Government Employees Pension Fund gave an update on their respective quarterly reports.<\/p>\n
Dr Daniel Matjila, Chief Executive Officer of the PIC, said in his presentation that the body has allocated more than R196 billion to SOEs in the past year of which 88% is in the bond market.<\/p>\n
DA member Alf Lees, however, questioned the PIC\u2019s investment in SOEs, asking if it\u2019s producing the necessary return on investment.<\/p>\n
Responding to a question, Jonas acknowledged that the PIC needed to balance its mandate to invest in companies that will serve South Africa\u2019s developmental agenda with the imperative to yield a positive return on investments.<\/p>\n
\u201cThere\u2019s a big debate about the mandate of the PIC. But we need to find a balance between transformation and getting value for money. Yes, the PIC needs to play a transformational role, but not to the detriment of investors,\u201d Jonas said.<\/p>\n
\u201cOn investing in SOEs we need to heighten our due diligence process, as some aren\u2019t making the progress at the pace we think they should.\u201d<\/p>\n
The PIC, which oversees the bulk of the South African government\u2019s pension fund money and is mandated to make investments on its behalf, faced a grilling from MPs about its investment mandate and whether there is any political meddling when such decisions are made.<\/p>\n
David Maynier, DA MP and Floyd Shivambu from the EFF asked the PIC CEO, Daniel Matjila, if he had ever met with the controversial Gupta family about possible investments.<\/p>\n
\u201cI personally haven\u2019t met any of them,\u201d Matjila responded, \u201cbut I don\u2019t know if anybody else (at the PIC) has.\u201d<\/p>\n
The Guptas’ influence in government affairs came to the forefront last month when senior figures, including Jonas, went public to say the family had exerted undue sway, including offering cabinet positions.<\/p>\n
The Guptas have business interests in a number of businesses, ranging from media to mining.<\/p>\n
MPs also questioned the PIC about \u201cquestionable\u201d direct loans to \u201cobscure\u201d companies, and requested to have sight of the body\u2019s investment policy.<\/p>\n
Matjila undertook to respond to these questions in writing, which would serve before the committee in due course.<\/p>\n