(Bloomberg) — Africa’s biggest fund manager lost a Labour Court case that may compel it to pay bonuses to executives that were withheld on instruction from the then finance minister amid a governance scandal.
The Public Investment Corp., which oversees 2.34 trillion rand ($154 billion) in assets, was ordered in a Feb. 18 ruling by Judge Graham Mashoana to pay Mervin Muller, its former head of private equity, 3.28 million rand plus interest the court said he was contractually entitled to. The order may mean that other executives will be eligible to their performance-related bonuses — about 51 million rand of payments were held back in 2018 and 2019.
The money manager, which mainly oversees the pensions of South African state workers, faced allegations of corruption, political interference and governance lapses during months of testimony at a judicial inquiry, the findings of which were released in March last year. Senior managers including former Chief Executive Officer Dan Matjila left the organization and some were fired. A number of executives have demanded their bonuses.
Former Finance Minister Tito Mboweni “did what he did to prevent the PIC from performing its contractual obligations,” Mashoana said. “His actions are invalid” because they were beyond the scope of his legal authority, the Johannesburg-based judge said.
Mboweni, who resigned from the cabinet in August, referred queries to the current minister, Enoch Godongwana, or his deputy. The PIC declined to comment, saying it was studying the judgment. The National Treasury, which is overseen by Godongwana, didn’t immediately respond to an email seeking comment.
Muller, who left the company in March 2019, declined to comment. The PIC has two weeks to decide whether to appeal.
The money manager said in 2020 it didn’t pay out long-term incentives for the 2017-18 financial year, while long- and short-term incentives for the 2018-19 year were withheld.
At the time the National Treasury said the bonuses wouldn’t be paid until it was determined if the executives played a role in the collapse of governance at the institution.
