The fund‚ which is by far South Africa's biggest investor with more than R1trn under management‚ is keenly watched because of its size and effect as an investor. Its decisions and those of the Public Investment Corporation (PIC)‚ which manages its assets‚ are increasingly subject to internal and external contestation.
Finance Minister Pravin Gordhan has called the new board's first meeting for next Friday‚ at which a chairman and deputy chairman will be appointed.
Six months have passed since the old board should have finished its term of office. By waiting before constituting the new board‚ Gordhan had hoped that the issue of the suspension of‚ and disciplinary steps against‚ the principal executive officer‚ John Oliphant‚ would have been resolved. The old board had, therefore, been asked to continue to sit‚ as the law allowed.
But the case against Oliphant has dragged on and the crisis within the fund has deepened.
The row centred on the breakdown of the relationship between Oliphant and the chairman of the board‚ Arthur Moloto‚ who is also an MP.
Oliphant was suspended for exceeding the limits of his delegated signing powers in a contract with an advertising agency‚ MotherRussia‚ which had won a tender for an advertising campaign for the fund.
His attempts to rectify this retrospectively were found to be irregular‚ as was his failure - and that of several colleagues - to take the tender to the fund's bid evaluation committee in the first place.
Both he and the head of the fund's secretariat‚ Adri van Niekerk‚ were charged over the irregularities. Oliphant disputes the charges.
His suspension laid bare the toxic atmosphere that had been developing among different factions within the staff. Within a short time‚ it had become clear that there were deep divisions‚ with some staff members apparently aligning with Moloto and others seeing themselves as loyal to Oliphant. Accusations flew over favouritism‚ factionalism and intimidation.
As part of efforts to improve governance‚ Moloto says he called in the Ethics Institute of South Africa "to assess the workplace environment and make suggestions as to how the fund could improve its internal staff management processes".
These divisions‚ he says‚ were of the sort that "inevitably crop up between staff members" and to characterise them as a crisis "is merely a subjective viewpoint".
But the fact that some members of staff saw these as particularly serious was reflected in the responses which later became part of the evidence in a disciplinary inquiry.
At a meeting to inform staff of Oliphant's suspension‚ Moloto responded to the fight between the factions - led by the manager of the internal audit team on the one hand and the legal and compliance manager on the other - by saying that should either side be found to be in the wrong‚ there would be consequences.
He also remarked that he did not like to be trifled with and that‚ like a crocodile‚ his humility should not be mistaken for timidity.
But rather than restoring order‚ Moloto's comments led to a further increase in tension. The head of internal audit‚ Lindiwe Fongoqa‚ formally complained that she felt "intimidated". In turn‚ Moloto took exception to her comments‚ seeing it as negative commentary on his integrity.
This led Moloto to institute the third disciplinary inquiry in six months‚ against Fongoqa. He says this was motivated by Fongoqa's "baseless allegations‚ which necessitated disciplinary action".
In the end‚ she was acquitted‚ an outcome which Moloto says the board has accepted‚ although it disagreed with the findings.
As the new board prepares to take over‚ Oliphant's hearing continues amid accusations that he has been stalling the proceedings‚ as a new board would be likely to treat him more favourably. His colleague‚ Van Niekerk‚ has settled after a plea bargain in which she acknowledges guilt in return for a final warning.
How the new board deals with both the fallout of the past six months and with restoring due process‚ trust and discipline‚ will be the deciding factor in whether the fund is stabilised or goes the way of many public institutions‚ torn apart by feuding and a toxic environment.
With different interest groups already intensely lobbying for the position of chairman on the new board‚ that may be more difficult than expected.
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
