Standard Bank's alleged exploitation of the Public Investment Corporation

Despite the Public Investment Corporation (PIC) facing governance and performance challenges, the country’s banks - especially Standard Bank - have been engaging in multiple significant business deals and collaborations with the state-owned asset management entity over the years, allegedly continuing to exploit the situation for their own gain.

United Democratic Movement (UDM) leader General Bantu Holomisa recently raised concerns about commercial banks. He accused them of structuring self-serving deals with the PIC that leave the pension fund, and ultimately public servants, to shoulder significant risk.

Holomisa, in a formal letter addressed to President Cyril Ramaphosa and the Chairperson of the Parliament’s Standing Committee on Public Accounts (SCOPA), Songezo Zibi, sounded the alarm over what he described as deeply troubling irregularities within the PIC. He cautioned that the scale and nature of these alleged transgressions could rival, if not surpass, the infamous state capture scandal.

Holomisa’s communication urged urgent parliamentary scrutiny and executive intervention, warning that the reported governance lapses, questionable investment decisions, and potential conflicts of interest within the PIC posed a serious threat to the integrity of the institution and the security of public funds entrusted to it.

He claimed that some banks advised the PIC on risky deals while securing their own financial positions in the same transactions, suggesting these banks should be held accountable. He said these banks hide behind the so-called loopholes, a term for a set of internal policies and procedures that restrict the flow of confidential information between departments or teams within the same firm.

Holomisa further stated there is one bank that has been more prominent in deals involving the PIC and the Government Employees Pension Fund (GEPF), both as an advisor and a participant in the more secure portion.

When asked to identify the financial institution involved, Holomisa unequivocally confirmed that the bank in question is Standard Bank. He emphasised that the allegations and concerns he raised in his correspondence specifically relate to the bank’s dealings with the PIC.

Holomisa further suggested that Standard Bank’s conduct warrants closer investigation, given its prominent role in managing state-related financial transactions and its history of extensive engagements with the PIC, despite the persistent governance controversies surrounding the state-owned asset manager.

Meanwhile, Zibi said he has noted Holomisa’s letter and has indicated that he will be writing to the PIC, requesting specific information regarding the allegations.

He said this information will assist SCOPA in determining the cause of action.

“For example, where there are allegations of inflated asset prices, the PIC needs to indicate whether there were independent asset valuations, and for those to be provided. In that way, the Committee can ascertain whether the price paid is in line or out of line with the valuation,” said Zibi.

According to media reports, Standard Bank has been involved in multiple deals and has a long-standing investment relationship with the PIC.

In 2004, Standard Bank contracted with PIC Solutions for credit risk consulting services, though this appears to be a separate, private company from the state-owned entity. However, it is not clear whether this deal still exists or not.

In 2019, it was revealed during the Mpati Commission of Inquiry that the PIC (on behalf of its main client, GEPF) agreed to acquire a 25% stake in SA Home Loans, a company 50% owned by Standard Bank at the time. The PIC also undertook to provide a substantial financial facility of R9 billion to SA Home Loan, using GEPF money.

The Mpati Commission was established by Ramaphosa in October 2018 to investigate allegations of corruption, maladministration, and improper investment decisions at the PIC. Specifically, it was created to examine whether PIC directors or employees abused their positions for personal gain, investigate issues with governance and investment decisions, and review the protection of whistleblowers.

Last year, the Competition Commission approved the GEPF to increase its shareholding in SA Home Loans. The approval, granted in July 2024, was for the acquisition of an additional 25% stake, which increased the GEPF’s total shareholding from 25% to 50%. From December 2024 (and continuing in 2025), Standard Bank and the PIC have also been involved in a joint investment with Old Mutual in Curro’s Meridian group of schools to further access to affordable education.

Standard Bank, as a corporate and investment bank, also acts in a transactional capacity, such as arranging bond issuances and facilitating financing for various entities, in which PIC is participating as an investor or co-founder.

Last month, Standard Bank acted as a joint global coordinator on the selloff of Anglo American’s remaining 19.9% stake in Valterra, South Africa’s major integrated resource-to-market platinum group metals (PGMs) company. The PIC holds approximately 7% of Anglo American shares. It also holds a separate 1.9% stake in Anglo American’s South African iron ore subsidiary, Kumba Iron Ore.

In October 2025, Standard Bank acted as the sole lead arranger and sustainability coordinator for African Bank’s R700 million Social Bond issuance. The Social Bond is intended to support African Bank’s strategy for financial inclusion and impact the micro, small, and medium enterprise (MSME) sector in South Africa. PIC holds a 25% share in African Bank.

Standard Bank also acts as an investor, custodian, and partner with the PIC’s external asset managers, such as Argon Assets Management, Differential Capital, and Meago Assets Management.

Asked for a comment, Standard Bank spokesperson Ross Linstrom did not respond to specific questions, saying the bank operates under a comprehensive Conflict of Interest Management Policy, aligned with the Financial Advisory and Intermediary Services (FAIS) Act and the JSE Debt Listings Requirements.

Linstrom said these safeguards are designed to uphold the integrity of “our” operations and protect client interests.

“Standard Bank applies rigorous due diligence and governance protocols when advising clients on transactions. Standard Bank is committed to promoting transparency in all its dealings. The bank operates within a robust legal and regulatory framework, including compliance with legislation such as the Banks Act, the Financial Sector Regulation Act, and the Protection of Personal Information Act (POPIA). These laws govern how financial institutions manage client information, conduct due diligence, and uphold fiduciary responsibilities,” he said.

“While client confidentiality remains paramount, Standard Bank engages constructively with regulators, oversight bodies, and other appropriate channels to support transparency, accountability, and the integrity of the financial system. We remain committed to restoring and maintaining investor confidence through ethical conduct and responsible financial stewardship,” added Linstrom.

The PIC also declined to answer specific questions and instead sent a statement announcing that it is preparing detailed submissions to the Presidency, Parliament committees and other government agencies to substantially repudiate “false and malicious” allegations made by Holomisa about the state of governance and the investments the PIC manages on behalf of its clients.

However, former PIC CEO, Dr Dan Matjila, said these suspicious transactions have been happening for a while, adding the allegations are being ignored to protect “certain people”.

“Instead, Ayo Technology Solutions becomes the topic to divert attention,” he said, adding that the banks will remain untouchable as they are influencers in the financial space.

Political analyst Zakhele Ndlovu said it appears that the PIC executives are either incompetent or in cahoots with the banks. Ndlovu said the executives need to be held accountable for negligence and colluding with banks.

He said this could be a strategy to fleece the PIC.

Economist Dr Sean Muller said the problem with public-private partnerships is that the public carries the risk and the private partners get the upside benefits, adding that South Africa has not adequately addressed this.

The PIC recently placed its Chief Investment Officer (CIO), Kabelo Rikhotso, on precautionary suspension, with immediate effect, following allegations of misconduct through a whistleblower report in October 2025.

Although specific details have not been made public, some reports mention internal governance issues and potential violations of FAIS certification as contributing factors.

This is despite the Mpati Commission exposing systemic governance failures, political capture, and weak accountability in the final report released in March 2020. Holomisa’s allegations suggest these issues persist, with internal power struggles and the suspension of senior executives, including Rikhotso, raising fears of factional interference.

The PIC, which manages over R3 trillion in public assets, is regulated by the National Treasury, the Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB) to ensure financial stability, market integrity, good governance and the protection of the public sector funds.

One of the cores of its fiduciary duty is the legal obligation to act in the best interest of its clients (the beneficiaries of the funds, such as government employees and pensioners) rather than its own or other parties’ interests. This requires the PIC to manage the money and properly, carefully, avoid conflicts of interest and keep accurate records.

Asked if they are aware of the situation and what has been done about it, the FSCA said it is aware of recent public commentary regarding certain transactions involving the PIC.

"While the FSCA supervises the market conduct of licensed financial institutions, it does not oversee the investment decisions or portfolio management activities of the PIC. 

"The FSCA’s mandate is to ensure that financial institutions treat their clients fairly and act with integrity. Where there is evidence that a licensed entity may have contravened financial sector laws or conduct standards, the FSCA considers such matters within the scope of its regulatory powers. At this stage, the FSCA is not in a position to comment on specific entities or transactions,’’ it said.

SARB’s media team said the Reserve Bank does not comment on the operations of individual banks.

The Treasury shared the statement issued by the PIC announcing its intentions to report Holomisa to the Presidency and Parliament.

There are also concerns that the PIC has not been transparent enough, with the PIC board previously having tried to use a legal opinion to avoid providing information to SCOPA. In October, DA MP Dr Mark Burke accused Zibi of blocking Members of Parliament from accessing key documents on PIC scandals.

Burke claimed that the documents include potential forensic reports on the PIC’s investments. He stated that Zibi’s office received a large stack of hard copy documents from the PIC but had not made them available to other committee members.

Mmusi Maimane, the leader of Bosa (Build One South Africa movement), said that as the state assets manager, how the PIC is governed affects every South African, and most directly the millions of public servants whose pensions it holds, including teachers, nurses, police officers and civil servants, adding that greater Parliamentary oversight is needed.

manyane.manyane@inl.co.za