The High Court in Pretoria has set aside the precautionary suspension of Public Investment Corporation (PIC) chief executive Patrick Dlamini (pictured), finding that the previous board acted beyond its powers and failed to follow the governance procedures required to suspend him.
The judgment, delivered on 4 August, clears the way for Dlamini’s return after three weeks on suspension, but it does not determine the whistleblower allegations or other investigations that contributed to the governance problems at the PIC. Instead, it addresses a narrower legal question: whether the previous board had the authority to suspend the chief executive in the manner that it did. The Court found that it did not.
The suspension became one of the central issues in the governance breakdown that preceded the resignation of the previous non-executive directors and the appointment of a new board last week.
The application was effectively unopposed. Although the board filed a notice of opposition, it did not deliver an answering affidavit or appear at the hearing.
Judge Mandla Mbongwe held that section 6 of the PIC Act gives the Minister of Finance, acting in consultation with Cabinet, the power to appoint the chief executive, while the board’s role is limited to selecting and recommending a suitable candidate.
The Court further found that the PIC’s Delegations of Authority prescribe a specific process for suspending the chief executive. The suspension must be recommended by the Human Resources and Remuneration Committee, initiated by the chairperson, and approved by the Minister of Finance, acting in consultation with Cabinet.
The Court found that none of those requirements had been met.
“The board acted unilaterally, without ministerial approval, and in disregard of its own policies.”
The Court also considered whether reliance on the PIC’s whistleblower policy could cure the board’s lack of authority to suspend the chief executive.
Judge Mbongwe rejected that proposition. He held that the Delegations of Authority expressly provide that where they conflict with any PIC policy, the Delegations prevail. Whistleblower protections exist to safeguard those who make disclosures from retaliation, the Court said, but they do not confer powers of suspension on the board. Internal policies cannot override statutory or contractual provisions.
Intervention applications dismissed
The Court considered two applications to intervene in the proceedings.
One was brought by government employee and Government Employees Pension Fund (GEPF) member Jabu Happy Moche, who contended that his pension interests would be imperilled if Dlamini were reinstated. Judge Mbongwe found that Moche’s interest was indirect because his pension rights lay against the GEPF rather than against the PIC or its chief executive.
“Were his reasoning correct, all 1.7 million members of the GEPF would have to be joined, which is untenable. His application must therefore be dismissed.”
The Court also dismissed an application by Public Interest South Africa (PISA), which sought admission both as amicus curiae and as a respondent.
Judge Mbongwe held that an amicus curiae is expected to assist the Court by providing independent submissions or expertise. Instead, PISA had adopted a partisan position, effectively seeking to defend the board’s decision after the board itself had chosen not to participate in the proceedings.
The Court concluded that PISA was attempting to step into the shoes of the PIC board rather than assist the Court and dismissed its application.
Court found matter urgent
The Court found that Dlamini had demonstrated prejudice in two principal respects: he had been immediately divested of his statutory duties as chief executive, while the resignation of several directors had contributed to instability at the PIC.
Judge Mbongwe held that those developments engaged the public interest because of the PIC’s responsibility for managing government investments.
The judgment states that the invalid suspension of the chief executive and the subsequent resignations of several board members posed “a grave threat to the stability of government investments across numerous sectors of the economy”. It adds that the potential destabilisation of the PIC carries the risk of “massive economic harm to the national economy; harm so profound that it is, in truth, too ghastly to contemplate”.
The Court added that it could not ignore its constitutional obligation to protect the public interest by ensuring that institutions entrusted with public resources operate in accordance with the constitutional values of accountability, responsiveness, and transparency.
The Court declared both the precautionary suspension notice issued on 13 July and Dlamini’s suspension unlawful, invalid, and of no force or effect.
It also ordered the PIC and its board, as the first and second respondents, jointly and severally to pay the costs of the application, including the costs of two counsel.
PIC and Treasury respond
In a statement issued after the judgment, the PIC said the ruling paved the way for Dlamini’s imminent return and would bring “much-needed leadership stability” to the organisation. It said the newly appointed board was expected to meet later this week, and Dlamini would work with the board “to bring stability to our organisation and advance the PIC’s mandate”.
The PIC also highlighted the Court’s observations about the risks that instability at the Corporation could pose to government investments and the wider economy.
Finance Minister Enoch Godongwana said the judgment vindicated the steps taken by National Treasury and Cabinet to restore governance at the PIC, describing those actions as “good and necessary”. He said they had been triggered, in part, by Dlamini’s “hasty removal” without due consultation and process.
