Another PIC head rolls over 'serious impropriety' on board of VBS Bank

Ernest Nesane (front row, second from left) with fellow directors of VBS Bank.
Ernest Nesane (front row, second from left) with fellow directors of VBS Bank.
Image: VBS

A second executive at the Public Investment Corporation has left his job over “serious allegations of impropriety” when he sat on the VBS Bank board.

Now the PIC‚ which manages investments by the Government Employees Pension Fund‚ is launching a forensic investigation of all transactions relating to its 25% shareholding in VBS.

The resignation of Ernest Nesane‚ executive head for legal counsel‚ governance and compliance‚ had been accepted and took immediate effect‚ PIC corporate affairs head Deon Botha said on Friday.

The other PIC director on the VBS board‚ executive head of risk management Paul Magula‚ was fired earlier this year after being found guilty at a disciplinary hearing of poor performance.

Botha said Nesane testified before advocate Terry Motau’s forensic investigation into VBS Mutual Bank earlier this week. “Following his evidence‚ the PIC was made aware of serious allegations of impropriety against Mr Nesane‚” he said.

Nesane and Magula were directors of VBS until the Limpopo-based mutual bank was placed under curatorship in March by the South African Reserve Bank.

Said Botha: “As company directors and PIC executives‚ both Nesane and Magula were entrusted with a duty of care to ensure that the institution and its business practices apply the highest standards of ethics and good corporate governance.

“The PIC is concerned about the developments that have come to light since the commencement of the VBS inquiry and more so that two of its former employees have been implicated of impropriety in their personal capacity.

“The PIC ... has resolved to appoint a forensic investigation to probe all transactions in relation to its investment in VBS Mutual Bank.”

Botha said the scope of the investigation‚ including its terms of reference and timelines‚ would be made clear once the investigator had been appointed.

The spokesman said the PIC had “noted” the Sunday Times report at the weekend about an affidavit claiming one of its executives received a R5-million cash bribe from VBS.

“Should there be any proof that a PIC employee has received such a bribe‚ the PIC will immediately institute the appropriate disciplinary proceedings and report the matter to law enforcement authorities‚” he said.

“The PIC hopes that the forensic investigation will assist in determining if any‚ or to what extent‚ PIC officials were involved in the demise of VBS bank. The PIC will not tolerate any form of wrongdoing amongst its employees and related parties‚ which could potentially undermine the PIC’s objective and legal mandate of generating positive returns for its clients.”

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