Edition: Mar - May 2014
Editorials

FUND GOVERNANCE

Elephant circus

A new GEPF board might be in a position to decide on what happens next with John Oliphant.

Hand it to Finance Minister Pravin Gordhan. Whether by clever design or useful coincidence, he might have hit on a means to vaporise the controversy over suspension of John Oliphant as principal executive officer of the Government Employees Pension Fund (TT Dec ’13-Feb ’14).

Gordhan, representing government as the employer, has appointed a fresh batch of trustees and alternate trustees to the GEPF board. Of the eight trustees he has appointed, only two are reappointed. In effect, there’s now a new board that can look afresh at extant decisions of the old.

High on the priority list must be the progress, or lack of it, in bringing to a head the disciplinary charges against Oliphant. Similarly within the board’s purview would be to reassess the validity of the allegations, then to proceed with the charges or to scrap them.

Armed with a forensic report by accountancy firm PricewaterhouseCoopers – such an ominous term is “forensic” – that by this stage the internal disciplinary process should long ago have been resolved; for Oliphant either to be fired or exonerated and reinstated. However, the timelines make it less simple.

Apparently, appointment of the new trustees cannot be formalised prior to the next board meeting. This is unlikely to be held until March. It means that the old board can push for finalisation of the Oliphant matter before it is reconstituted, in which case the question will arise of whether its decision can bind the new. Alternatively, the matter is delayed until the reconstituted board takes up the cudgels.

For the sake of argument, assume that the old board wants to dismiss Oliphant and the reconstituted board wants to reinstate him. One scenario would then be for Oliphant to decide for himself what he wants to do: whether he can again work with colleagues who’d backed the old board; whether the future environment promises to be less divisive, and whether his support from the new board will be enthusiastic.

These are difficult decisions for a man whose contribution should not be lost to the pension-fund industry, either from within the GEPF or outside it. But the most important priority, one way or the other, is his exoneration. Without this, he can look to going nowhere fast. Spare the prospect of CCMA and Labour Court appeals.

In early October, Oliphant had been suspended by the majority decision of a board under the chairmanship of ANC MP Arthur Moloto. The longer the process takes to resolution, the more disruptive it must be for Oliphant personally. He is unable to defend a reputation, openly and beyond the constraints of an in camera trial, that the act of suspension has tarnished.

It must also be detrimental to routine operations of the GEPF, being under temporary leadership of months-long duration. Staff at this largest of SA pension funds cannot know whether to hold their breath for Today’s Trustee March/May 2014 43 Oliphant.indd 2 2014/02/20 8:21 PM Oliphant’s return, and to pursue the guidance he’d provided, or to abandon such projects as the Code for Responsible Investment that he’d initiated.

Amongst the eight employer representatives, the only survivors from the old board are Gladys Modise and Moira Moses (see box). These eight, together with the eight employee representatives who appear to remain unchanged, will elect a new chair.

Conspicuous by his absence from the ministerial list is Moloto. His reign at the GEPF becomes yesterday’s story, presaging a depoliticisation of the board whose politicisation should never have been entertained in the first place.

The cabinet statement of last December, announcing approval of the employer nominees and their alternates, does not say when their term begins. Under the Government Employees Pension Law, the fouryear term of the old board was to have expired last September. Yet it suspended and charged Oliphant a fortnight later.

Despite queries from Today’s Trustee, the GEPF has not identified the provision in the GEP Law that allowed the old board’s term of office to be extended. Neither has it agreed to a request, under the Promotion of Access to Information Act, to make available for publication and scrutiny a copy of the forensic report.

Emmanuel Lekgau, the GEPF legal and compliance manager, responded in December: “The GEPF cannot at this stage assess your request as it relates, either directly or indirectly, to the disciplinary process currently underway. The GEPF would not want to prejudice any parties to that process.”

It’s unclear whether the decision to deny release of the forensic report was taken on Oliphant’s behalf, with or without his concurrence. The longer its release is delayed, the longer it will take not only for Oliphant publicly to defend himself but also for the public to assess for itself the reaction or overreaction to alleged supply-chain contraventions. It will stand as model for analysis in the implementation of good corporate governance.

Writing to Business Day in January, GEPF acting principal executive officer Joelene Moodley explained that the hearing was supposed to have started last October but that Oliphant’s attorneys had twice requested postponements: “The matter did commence finally last month and has been set down for the end of this month.”

By the time of TT going to press, the silence remained deafening.

  • This is an updated version of the article, by TT editorial director Allan Greenblo, originally published by Moneyweb on Jan 21.

4.11. Cabinet approved the appointment of the following Employer Nominee Trustees to the Government Employees Pension Fund:

a) Mr Stadi Mngomezulu (National Treasury)
b) Mr Bhekithemba Thabo Gamedze (Minister of Finance)
c) Dr Renosi Mokate (Minister of Finance)
d) Dr Malcolm Barry Kistnasamy (Department of Health)
e) Ms Gladys Modise (Department of Basic Education)
f) Ms Esther Euphane Aletta (Barbara) Watson (Department of Public Service and
   Administration)
g) Mr Nkhangweleni Seth Makhani (Department of Defence)
h) Ms Moira-Anne Moses (Public Investment Corporation)

Cabinet approved the appointment of the following Employer Nominee Substitute Trustees:

i) Ms Lindy Ann Bodewig (National Treasury)
j) Adv Lindiwe Grace Nkosi-Thomas (Minister of finance)
k) Mr Abel Sithole (Minister of Finance)
l) Dr Thamizhanban Pillay (Department of Health)
m) Dr Mogenthiran Shunmugam (Morgan) Pillay (Department of Basic Education)
n) Dr Lesiba Alex Mahapa (Department of Public Service and Administration)
o) Brigadier Johan David Griesel (South African Police Service)
p) Ms Rejane Woodroffe (Public Investment Coporation)

Extract from GCIS statement on the Cabinet meeting of 4 Dec 2013