outh Africa’s largest asset manager, the Public Investment Corporation SOC Ltd. (PIC), has been rocked by scandal following the precautionary suspension of its Chief Investment Officer (CIO), Kabelo Rikhotso.
The move, announced by the PIC Board on Friday, follows “allegations of misconduct that were levelled against him through a whistleblower report,” according to a formal media statement issued by the state-owned investment giant.
Shock waves
The decision has sent shockwaves through both government and financial circles, not least because of the high-profile nature of the post and the substantial assets under the PIC’s administration.
The corporation oversees more than R2 trillion in pension and social funds on behalf of South Africa’s public sector employees.
In its official statement, the Board sought to characterise the suspension as a procedural, not punitive, measure.
“The Public Investment Corporation SOC Ltd. (PIC) Board has resolved to place its Chief Investment Officer (CIO), Mr Kabelo Rikhotso, on precautionary suspension, with immediate effect. Mr Rikhotso’s suspension follows allegations of misconduct that were levelled against him through a whistleblower report,” the statement read.
“The suspension is intended to ensure a fair, objective and independent investigation into these allegations. The suspension does not, in any way, constitute a finding, nor is it a pronouncement of any wrongdoing on the part of the CIO,” the Board stated, emphasising its adherence to “applicable labour legislation and internal PIC policies and procedures.”
In the meantime, continuity is to be ensured by the appointment of August van Heerden, the corporation’s Chief Risk Officer, as Acting Chief Investment Officer.
Reputation has been bruised
The PIC, whose reputation has been bruised by previous governance scandals, was unequivocal in affirming its commitment to transparency.
“The PIC remains firmly committed to the highest standards of accountability and corporate governance and to serving the best interest of its clients,” the Board insisted, though insiders suggest the latest revelation is likely to reignite scrutiny over internal controls and oversight.
While the PIC’s official statement was measured and legalistic, sources familiar with the matter say the allegations extend beyond mere procedural missteps. The allegations point to deepening concerns about the valuation of major investments overseen by the CIO’s office, notably holdings in MMI and AYO Technology Solutions.
According to PIC insiders, the whistleblower complaint reportedly raised red flags about the asset manager’s valuations of certain investments, with questions swirling about whether these assets were “valued too high” and, if so, by how much.
Sunday World put these precise questions to Rikhotso: “People say your suspension is because some investments—like MMI and AYO—were valued too high. Is that true? How much do you think they were overvalued, if at all? If you disagree, what would you say is the real value of those deals?”
His appointment has previously been questioned
Further, doubts were raised about Rikhotso’s initial appointment as CIO, probing whether he “had all the right qualifications for the role” and if “there were any doubts or issues raised then.”
On Friday, Rikhotso responded directly to Sunday World’s questions. In his written reply, he flatly denied being suspended: “I have not been suspended from my job at the PIC, and I would appreciate it if you were to share the source of your information.”
He vigorously defended his record at the PIC, referencing the organisation’s recent Integrated Annual Reports: “PIC’s performance is a reflection of the good work that the team has been doing under my leadership,” said Rikhotso.
On the contentious issue of investment valuations, particularly in relation to MMI and AYO,
Rikhotso stressed that he had no involvement in those deals: “The investments you make reference to were made 8 to 10 years ago. I was not a board member nor a PIC employee at the time and had no relationship with PIC. I joined the PIC in May 2022.”
He added, “Investment decisions at the PIC are committee-driven, and thus no single individual makes decisions in isolation.”
Rikhotso’s response was carefully couched “without prejudice”, and he concluded, “My rights remain reserved.”
Board not united behind suspension
According to well-placed sources, the Board’s vote to suspend Rikhotso was not unanimous. Some insiders described the mood in the boardroom as “tense”, with certain directors reportedly arguing that the whistleblower complaint did not amount to a clear-cut case for suspension.
Before the media statement was released, Sunday World asked board chairperson and deputy finance minister David Masondo whether “the PIC Board talked about suspending [Rikhotso]; how did the vote go? Was it a close decision, or was everyone in agreement? Did anyone on the board argue in [his] favour?” —but no response was received as of press time.
The lack of clarity around the specifics of the complaint, combined with the silence from both Masondo and PIC CEO Patrick Dlamini, only fuelled speculation that Rikhotso was protected at the highest level in the PIC.
MMI Chairman, Kholofelo Maponya said the transaction in question was informed by four separate valuations conducted by different parties.
“MMI’s valuation was lower than the PIC’s internal independent valuation (which was not disclosed to MMI during negotiations) but higher than two others. One of these was revised multiple times due to methodological inconsistencies, while another relied on unrelated figures and was therefore not comparable.”
Maponya said MMI accepted the lowest credible valuation as the basis for the transaction, in line with sound valuation and governance standards.
“MMI rejects any suggestion that the valuation process was irregular or that it contributed to any wrongdoing.”
