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The Public Investment Corp.’s board of directors offered to resign amid an inquiry into allegations of wrongdoing, throwing the South African manager of more than 2 trillion rand ($150 billion) deeper into crisis.

The institution responsible for most South African government worker pension funds has been “destabilized” by a series of claims, including against at least four board members, Chairman Mondli Gungubele said in a letter to Finance Minister Tito Mboweni co-signed by eight other directors. “Our assessment is that this may not be the end,” they said, adding that they are prepared to stay on until a new board is appointed.

Africa’s largest fund manager is the subject of an ongoing inquiry into various investment decisions, including in the bonds of Eskom Holdings SOC Ltd. and technology company Ayo Technology Solutions Ltd. In the past year, half of the PIC’s executive committee have been suspended or resigned, including ex-Chief Executive Officer Daniel Matjila.

Last week, the PIC said it would investigate allegations against two non-executive directors and acting CEO Matshepo More, who was not one of the signatories on the resignation letter.

“Without a board and a CEO in an acting capacity, it throws everything to some degree and is not a comfortable position to be in,” Patrick Mathidi, Johannesburg-based head of equities and multi-asset strategies at Aluwani Capital Partners. “This needs a speedy resolution.”

A spokesman for the ministry of finance said he couldn’t give an update on when an announcement on a new board would be made.

State of Paralysis

“These events have been unbearable to us as individuals and have undoubtedly had a negative impact on our professional integrity,” the board members said. They are “an attempt to bring the institution into a state of paralysis.”

The PIC, which invests government pension and other social funds, on Wednesday said it’s immediately starting a forensic investigation into allegations of impropriety made by an anonymous whistle-blower against three board members. The accusations come at the same time as a separate inquiry into South African government graft, shining a spotlight on the depth of corruption in the country.

The PIC inquiry was told last week by a former board member that the money manager would be better off without the country’s deputy finance minister, in this case Gungubele, chairing its board because it inadvertently exposes the continent’s biggest money manager to the perception of political interference.

Furthermore, another suspended employee this week said the institution has a culture of intimidation and coercion and the people who write investment reports often have no control of the valuations and recommendations contained in them.

Credit: Bloomberg