Saturday, February 22, 2014

State pension fund suspends top officer

State pension fund suspends top officer

By Donwald Pressly

Independent Newspapers
John Oliphant. Photo: Simphiwe Mbokazi

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Johannesburg - The Government Employees Pension Fund (GEPF) has confirmed that it has suspended its principal officer, John Oliphant, from October 15, ahead of a disciplinary inquiry into alleged unauthorised signing of contracts.

ANC MP Arthur Moloto, who is the chairman of the board of trustees, confirmed the suspension last night. “There is nothing confidential about it,” Moloto said, but asked that he be e-mailed further questions.

To much fanfare earlier this year, Moloto announced that the appointment of Oliphant would run until June 2017.

At the time of his appointment Moloto was effusive in his praise of Oliphant: “As head of investments and actuarial, he worked very closely with the board of trustees and our main investment manager, the Public Investment Corporation (PIC), in growing the asset base from about R620 billion in 2009 to a figure currently in excess of R1 trillion worth of assets under management.”

However, a GEPF source in Pretoria said the contracts Oliphant signed off related to certain consultancy contracts including a larger contract with an advertising house.

The DA’s spokesman on pension funds, David Ross, said he would be putting questions in Parliament to Moloto.

“We have been asking serious questions about the investment strategy of the GEPF for some time,” Ross said, noting reports of low contingency reserves, as well as investments in SA National Roads Agency bonds, cement producer Afrisam and other “developmental” investments.

Yesterday Oliphant said he could not comment on the matter. “I am not in a position to comment. I think you can speak directly to the chairperson of the GEPF].”

He said he had not been aware that he had been suspended, but understood that he had been placed on “special leave” instead.

Charges against Oliphant followed a high-level review of internal financial controls. Apparently certain irregularities were picked up regarding the fund’s procurement policy.

The GEPF is Africa’s largest pension fund with about 1.2 million active members, in excess of 300 000 pensioners and beneficiaries, and assets worth more than R1 trillion. State workers and retirees, including departmental bureaucrats, teachers, nurses and police, are among its members.

Oliphant has been replaced in the interim by head of corporate services Joelene Moodley. - Business Report


GEPF puts R5bn into fund for takeovers

Ann Crotty

The Government Employees Pension Fund (GEPF) is allocating R5 billion to a private equity fund that will invest in medium to large capital buyouts, as well as mergers and acquisitions.

The fund, to be named the South African Private Equity Fund, is one of three funds being set up by the GEPF with a total investment of R13bn and a focus on boosting job creation and contributing to renewable energy, food security and broad-based black economic empowerment (BEE).

The investment is part of the GEPF’s R60bn long-term developmental investment strategy.

The GEPF is the largest pension fund in Africa with more than 1.2 million members, 360 000 pensioners and more than R1 trillion worth of assets under management.

John Oliphant, the principal officer, said the sustainability of the GEPF investment portfolio was intrinsically linked to the growth of the South African economy. “With more than R1 trillion in assets under management, representing a third of the South African gross domestic product, we think it is prudent to invest in projects that contribute to economic growth and job creation. This, we believe, is in the best interest of our investment portfolio in the long term.”

The GEPF and the Public Investment Corporation, which manages the GEPF’s funds, have signed private placement memoranda that are designed to guide investment processes in the three investment funds.

The other two funds that are being established are the Environmental Sustainability Fund, which will be allocated R5bn and the Priority Sectors’ Investment Fund, which will be allocated R3bn.

The former will invest in energy renewables and efficiency, energy storage, clean energy and recycling projects.

It is expected to generate 500 megawatts of new, renewable energy and 300 million litres of biofuel a year.

The Priority Sectors Investment Fund will focus on projects that will have a substantial and positive impact on job creation and food security. The projects will be in areas such as manufacturing, agriculture, tourism, mining beneficiation and agro-processing. This fund aims to create more than 3 000 jobs, of which 25 percent will be in rural areas.

The Private Equity Fund is targeting broad-based BEE levels of one and three over three to eight years.

It is unclear whether the fund will be handling the R500 million investment that the GEPF recently announced it would be making in the R2bn transaction to buy Independent News & Media South Africa.

Analysts said yesterday that the transaction could fit into the GEPF’s objectives for its private equity fund.

According to a circular released last week by the Dublin-based holding company, the media company is generating after-tax profits of about R250m a year on turnover of about R2.3bn. The company’s profit levels have dropped significantly in the past three years.

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