UDM President and Deputy Minister of Defence and Military Veterans Major-Gen (Rt) Bantu Holomisa writes an open letter to President Cyril Ramaphosa and Chairperson of the Standing Committee on Public Accounts (SCOPA), Songezo Zibi.
By Bantu Holomisa:
Dear Mr President and Chairperson Zibi,
1. I had the privilege of attending the extended Cabinet Lekgotla at the end of September 2025, where you, Mr President, emphasised that the fight against corruption and the looting of state resources would be a top priority for the Government of National Unity. You further noted that the current climate of corruption and mismanagement has severely undermined investor confidence and that this situation must be decisively addressed.
2. The Judicial Commission of Inquiry into Allegations of Impropriety at the Public Investment Corporation (PIC) (‘the Mpati Commission’) was established by you, Mr President, in October 2018 to investigate allegations of corruption, maladministration, and governance failures at the PIC, Africa’s largest asset manager, overseeing pension and social funds exceeding R2 trillion at the time (now over R3.5 trillion).
3. Amongst others, the Mpati Commission in 2020 exposed the PIC as a politically captured institution plagued by poor governance, weak accountability, and corruption, particularly within its unlisted investment portfolio (Isibaya Fund). Its recommendations aimed to restore transparency and fiduciary responsibility, but implementation has been slow and inconsistent.
4. Instead, what the United Democratic Movement (UDM) presents hereunder is a stark picture of continued looting, mismanagement, and administrative bungling from top to bottom at the PIC and its Isibaya Fund since the conclusion of the Mpati Commission, a situation of enormous proportions that rivals the State Capture scandal itself. This does not require another commission of inquiry. Rather, the UDM sets out below a series of concrete proposals for decisive action to stop the rot in its tracks through innovative solutions, strengthened parliamentary oversight, and firm law enforcement intervention.
The Lanseria Airport Holdings case
5.1. This presents what appears to be brazen looting of PIC funds, arguably worse than anything uncovered by the Mpati Commission. Around 2013, Harith General Partners, a group of BEE partners, and the Government Employees Pension Fund (GEPF) invested in Lanseria Airport. The BEE partner, Acapulco Trade and Invest, was fully funded by the PIC with a loan of about R350 million, to be repaid from future dividends. More than a decade later, the loan remains unpaid and has ballooned to over R600 million, leaving the investment deeply underwater. Instead of writing it off, the PIC and its BEE partner conjured a revaluation, declaring the asset suddenly worth R1 billion.
5.2. The PIC then took over the BEE partner’s shares as security and astonishingly concluded that it now owed the BEE partner R400 million. In other words, a failed investment was transformed on paper into a profit for the debtor, creating R400 million of value out of thin air. From a debt of R600 million with no repayment capacity, the BEE partner miraculously walked away with a R400 million windfall (the BEE shareholders got their share this month and they are allegedly fighting over the loot). This may be one of the most blatant acts of looting in PIC history, rivalling the excesses of the Dr Dan Matjila era.
5.3. To make matters worse, the GEPF itself already holds an impaired stake in Lanseria Holdings. This means the PIC will either have to immediately write off the shares it took over or get the GEPF to revalue the shares to avoid scrutiny. You cannot hold the same shares on the same balance sheet at different valuations.
The “New Karan Beef” and FlySafair deals
6.1. In 2019, the PIC was forced to halt its planned investment in Karan Beef after a whistleblower exposed alleged price inflation that pushed the valuation to R5.2 billion. Despite prior approval, the deal was never implemented following the Mpati Commission’s intervention.
6.2. Now, a similar pattern appears to be emerging with FlySafair. The airline is seeking local investors after regulatory rulings on ownership, and it is alleged that a consortium is attempting to acquire it with PIC funding at an inflated valuation of about R7.9 billion, nearly double the estimated fair value. If executed, the transaction could result in massive value destruction, mirroring what would have happened with Karan Beef.
6.3. While FlySafair is a strong airline, it is certainly not worth more than R3.9 billion. The airline industry remains highly volatile, and history shows that even leading carriers can collapse within years. Yet again, just as in the Lanseria Airport and other controversial transactions, Harith General Partners (linked to Mr Tshepo Mahloele) appears to be involved. This deal is currently being hotly debated within the financial services sector. No approvals yet. Just like Karan Beef, there is a push to extract billions from the PIC, and as always, write-offs will follow soon afterwards.
The latest scandals in the public domain
7.1. The latest developments at the PIC reveal a deepening power struggle within the institution, exposing how political factionalism continues to undermine its governance.
7.2. The suspension of Chief Investment Officer Kabelo Rikhotso in early October 2025, officially framed as part of a misconduct investigation, has reportedly triggered internal tensions between rival camps competing for control of the corporation’s investment machinery. According to insider accounts, the battle is not merely administrative but linked to political influence over access to capital and deal flow.
The episode underscores a worrying pattern: instead of operating as an independent and professionally managed custodian of more than R3.5 trillion in public servants’ pension assets, the PIC has again become a stage for self-enrichment. This climate of uncertainty and factional interference threatens both investor confidence and the fiduciary security of millions of pensioners who depend on the integrity of the institution.
7.3. In July 2025, the Thabiso Moshikara scandal reignited concerns about governance at the PIC. Moshikara, acting head of the PIC’s Unlisted Investments division, was accused of demanding a R3 million bribe from businessman Ralebala Mampeule, whose company Levoca 804 had received R693 million in PIC funding to buy a stake in Metrofibre Network. Mr Mampeule claimed that after the investment soured, Mr Moshikara allegedly threatened to cut off funding unless he paid the bribe, leading to a criminal investigation for extortion and Mr Moshikara’s suspension in October 2025.
The case, which erupted in the same period as other senior-level suspensions, has deepened divisions within the PIC and underscores how the Isibaya Fund, long criticised by the Mpati Commission for weak oversight and political interference, remains a focal point of instability in an institution managing over R3.5 trillion in public funds.
8. Investment losses and governance problems: the Daybreak Foods case
8.1. Daybreak Foods, once presented as a flagship black-empowerment investment, has become one of the most visible symbols of the PIC’s governance and oversight failures. Despite repeated warnings from the Mpati Commission about weaknesses in the unlisted portfolio, the PIC has continued to pour money into the struggling poultry company. In July 2025, the PIC injected a further R150 million into Daybreak, bringing its total exposure this year to about R400 million and total investment since 2015 to approximately R1.7 billion. The company entered business rescue in May 2025, following years of losses, poor governance, and operational mismanagement. The PIC’s decision to provide additional funding to a failing enterprise under these circumstances underscores the absence of effective oversight, proper risk assessment, and consequence management within its unlisted investments.
8.2. Observers note that, while the PIC claims to have implemented the Mpati Commission’s recommendations, its continued support of non-performing and poorly governed entities such as Daybreak Foods demonstrates that the underlying accountability mechanisms remain weak, opaque, and easily influenced.
9. Even after the Mpati Commission, corruption within the PIC appears deeply entrenched
The institution is increasingly viewed as ground zero for corruption in South Africa, with billions of rand lost through reckless investments and outright misconduct. The PIC manages over R3.5 trillion in pension funds on behalf of public servants, yet the scale of governance and oversight remains alarmingly weak.
10. The current PIC board appears unfit for purpose
10.1. Compared to boards of other major financial-sector entities, including even struggling state-owned enterprises like Eskom, the contrast is stark. It is deeply concerning that a fund managing R3.5 trillion in pensioners’ savings operates under such a fragile governance structure. This persistent instability raises serious questions: is it the result of oversight failures, or a deliberate design to enable political capture rather than protect public assets?
10.2. It is alleged that the board is struggling to constitute key subcommittees, such as the audit committee, due to a lack of people with the minimum required qualifications, i.e. chartered accountant expertise.
10.3. Furthermore, the board lacks sufficient investment experience to form a credible investment committee. At present, there is reportedly no one with appropriate investment credentials serving on the board. Of particular concern is the Minister of Finance’s recent appointment of the wrong individual, one Mr Maseko, to the board. This bizarre error raises further questions: was it a genuine mistake, or was the Minister misled into making the appointment? Either scenario reflects poorly on the integrity and diligence of the appointment process.
11. Involvement of the banks
11.1. Some of the top South African banks have been involved in advising the PIC to participate in many transactions that expose the PIC to reckless investment dealing, while at the same time participating in the more secure portion of the deals. These top banks need to be held accountable for their role in value destruction. They hide behind the so-called Chinese Walls. There is one bank that has been more prominent in the deals involving the PIC/GEPF. Both as an advisor and a participant in the more secure portion.
12. Investigation into the government pensions
Regarding the matter of the former SATBVC pensioners, which I raised during the State of the Nation Address debate on 14 February 2023, I wish to reiterate my concern that no progress has been made. At the time, you, Mr President, directed the Minister of Finance, Mr Enoch Godongwana, to establish a team to investigate the pension entitlements of civil servants from the former SATBVC states. You further tasked the Deputy President, as head of the task team on the benefits of military veterans, to provide you with a report on this matter. To date, however, no such report has been produced, and the affected pensioners continue to wait in uncertainty.
13. The Isibaya Fund remains the epicentre of corruption within the PIC
Despite the Mpati Commission’s warnings, little has changed. This unlisted investment portfolio continues to operate with weak oversight, opaque decision-making, and politically connected deal flows. It functions as a pot of money selectively accessed by a privileged few, often without proper risk assessment, leaving the PIC exposed to massive losses. The loss ratios are unacceptable by any commercial or development finance standard. The credit loss ratios of over 39% are purely criminal; no credible institution will allow such a level of brazen looting in the name of empowerment. Ultimately, the State and South African public are the real losers, given that PIC is guaranteed by the National Treasury. The scale of looting rivals the Gupta’s State Capture; the amount at risk is over R170 billion. The sophistication of the financial engineering and contracts is used to hide the brazen looting.
Many people hardly understand deal structuring. South Africa needs to know that something worse than the State Capture continues to thrive at the PIC. Given these persistent failures, it is time to ask difficult questions: Why should the Isibaya Fund remain under the PIC’s control at all? A more sensible approach would be to transfer its developmental and impact investment mandate to institutions better equipped for that purpose, such as the Development Bank of Southern Africa (DBSA) or the Industrial Development Corporation (IDC), where project evaluation, governance, and sectoral expertise are stronger. The PIC’s role could then be limited to allocating funds under DBSA or IDC supervision, or outsourcing mandates to independent professional managers with clear risk controls and accountability mechanisms.
The looting will continue as long as the fund remains under the PIC. The instability will never stop, and no commission can fix that. The Isibaya Fund at R175 billion (at 5% of total AUM 3.5 trillion) can be transformative for South Africa if applied prudently for development purposes as defined in the mandate. Currently, the fund is yielding negative returns. Based on the above number and high credit loss ratios, up to R70 billion is provided for ultimate write-offs; clear wastage, with minimal development impact except narrow enrichment of a select few.
14. The credit loss ratios of over 39% are purely criminal; no credible institution will allow such a level of brazen looting in the name of empowerment. Ultimately, the State and South African public are the real losers, given that PIC is guaranteed by the National Treasury. The scale of looting rivals the Gupta’s State Capture; the amount at risk is over R170 billion. The sophistication of the financial engineering and contracts is used to hide the brazen looting. Many people hardly understand deal structuring. South Africa needs to know that something worse than the State Capture continues to thrive at the PIC.
15. Given these persistent failures, it is time to ask difficult questions: Why should the Isibaya Fund remain under the PIC’s control at all? A more sensible approach would be to transfer its developmental and impact investment mandate to institutions better equipped for that purpose, such as the Development Bank of Southern Africa (DBSA) or the Industrial Development Corporation (IDC), where project evaluation, governance, and sectoral expertise are stronger. The PIC’s role could then be limited to allocating funds under DBSA or IDC supervision, or outsourcing mandates to independent professional managers with clear risk controls and accountability mechanisms. The looting will continue as long as the fund remains under the PIC. The instability will never stop, and no commission can fix that
16. Isibaya Fund at R175 billion (at 5% of total AUM 3.5 trillion) can be transformative for South Africa if applied prudently for development purposes as defined in the mandate. Currently, the fund is yielding negative returns. Based on the above number and high credit loss ratios, up to R70 billion is provided for ultimate write-offs; clear wastage, with minimal development impact except narrow enrichment of a select few.
17. Working at Isibaya or the PIC has, regrettably, become increasingly viewed as career suicide. What should have been an exceptional training ground for Black investment talent, a place to hone technical, ethical, and leadership capabilities, has instead become a graveyard for many promising careers. It is virtually impossible to attract top talent with the reputation that the Fund has; the inability to attract top talent makes it difficult to do good investments.
18. The United Democratic Movement herewith recommends that:
18.1. SCOPA convenes urgent public hearings with the PIC Board, the Chief Executive Officer, and the Government Employees Pension Fund to account for ongoing governance failures, ethical breaches, and poor investment decisions.
18.2. The Auditor-General and the Special Investigating Unit to conduct a forensic audit of the Isibaya Fund and the Unlisted Investments Division, focusing on politically connected deals, loss-making projects, and compliance with the Mpati Commission’s recommendations.
18.3. National Treasury to review the composition, competence, and independence of the current PIC Board, with a view to strengthening governance and reducing political interference.
18.4. The Minister of Finance to present to Parliament a status report on the implementation of the Mpati Commission’s findings and recommendations, indicating which reforms have been completed, delayed, or abandoned.
18.5. The Minister of Finance commissions a feasibility study on the transfer of the PIC’s developmental and impact investment mandate to institutions such as the DBSA or the IDC and reports the findings to Parliament within a defined timeframe.
18.6. All deals under the Isibaya Fund should be reported on their website on a quarterly basis, showing the full details of the transaction, with no exception. Confidentiality cannot trump the transparency required for public funds. Current disclosure is not sufficient at all. Full amount disbursed should be shown, valuations, beneficiaries, impairments, original investment amount and all settlements. Parties not comfortable with disclosure should seek funding from commercial banks.
18.7. Dealmakers at the PIC/Isibaya Fund should be paid based on economic return performance, not disbursement of funds. Once funds are disbursed, the dealmakers do not have “skin in the game”. That should stop. With the current return profile (i.e.negative returns), no bonuses should be paid irrespective of funds disbursed, just like in any commercial fund.
18.8. It is imperative that the Isibaya Fund be placed under immediate moratorium to facilitate its transition to a more credible and professionally managed platform, such as the DBSA, the IDC, or an independent third-party investment manager with robust governance frameworks and proven expertise. This decisive action will help stabilise the PIC by eliminating avenues for exploitative and politically motivated investments.
19. The United Democratic Movement believes that the protection of public pension funds is a matter of national importance. Intervention is essential to ensure that the PIC is not used as a vehicle for political patronage and that the R3 trillion in assets it holds are managed with the highest standards of integrity, professionalism, and accountability.
Yours sincerely
Deputy Minister Bantu Holomisa, MP
President of the United Democratic Movement – @NewsSA_Online
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