Business Maverick


Holomisa objects to Smile Telecoms CEO Irene Charnley being on the PIC board

Holomisa objects to Smile Telecoms CEO Irene Charnley being on the PIC board
Irene Charnley during an interview on August 2, 2009 in Johannesburg, South Africa. (Photo: Gallo Images / Financial Mail / Tyrone Arthur)

In a letter to Finance Minister Tito Mboweni, United Democratic Movement leader, Bantu Holomisa, raises questions around the appointment of former trade unionist and businesswoman Irene Charnley to the interim board of the Public Investment Corporation (PIC). Holomisa said Charnley is a former beneficiary of the PIC’s funding initiatives, making her ineligible to serve as a board member.

It has been more than two months since the 995-page report of the Commission of Inquiry into allegations of impropriety at the PIC —  led by retired Supreme Court of Appeal judge Lex Mpati —  was released to the public. 

Since then, politicians, the public and the press have delved into the details of the report including questionable multi-billion rand deals that have compromised the PIC’s governance processes over many years. 

But United Democratic Movement leader, Bantu Holomisa, has raised further questions around the PIC’s governance affairs and independence —  or the lack thereof —  relating to a member of the interim board, Irene Charnley.

On Wednesday 3 June, Holomisa wrote a letter to Finance Minister Tito Mboweni accusing Charnley of being a beneficiary of PIC funding, making her ineligible to serve as a board member. 

Charnley and 14 other individuals were appointed by Mboweni on the PIC board — chaired by Reuel Khoza — on 12 July 2019. The board term ends on 31 July 2020. 


The PIC is a state-owned asset manager that manages R2.13-trillion (a 2019 valuation) in government pension savings on behalf of the Government Employees Pension Fund (GEPF), and other social funds, including the Unemployment Insurance Fund and Compensation Fund. Mboweni oversees its operations. 

Mboweni’s office acknowledged Business Maverick’s request for comment but didn’t say whether he received Holomisa’s letter or whether he will act on it. 

Holomisa argued that there is enough evidence for Charnley to immediately vacate her seat on the PIC board.

About Irene Charnley

Charnley first made her mark on the African business community as a negotiator for South Africa’s National Union of Mineworkers where she spent 13 years coordinating various divisions of the union’s operations.  She later went on to become an executive director for the MTN Group and was one of the founding members of the National Empowerment Consortium that eventually owned 35% of Johnnic Holdings (now called Johnnic Communications).

Charnley left MTN in controversial circumstances, following the telecommunications group’s legal battle involving its Turkish operator, Turkcell, and the awarding of its operating licence in Iran. Turkcell alleged that MTN was granted a licence after it paid bribes to officials in Iran. Turkcell was pursuing not only MTN but former MTN Group CEO Phuthuma Nhleko and its now-former director — Charnley. Both executives were intimately involved in the negotiations with the Iranians. Business Maverick sources state the case is coming up in the Johannesburg High Court soon. 

Charnley has since set up shop as CEO of Smile Telecoms, a Mauritius-based telecommunications group with operations in Nigeria, Tanzania and Uganda. She is only one of two directors of the company that are registered with the Companies and Intellectual Property Commission (CIPC) in 2003. The directorships stated on the CIPC database differ from the PIC investment sheet on Smile, from which Holomisa quotes his information.


Beneficiary of PIC funding 

Holomisa reveals in his letter to Mboweni that the PIC concluded a $100-million investment in Smile in 2015, giving the PIC’s biggest client, the GEPF, a 7.69% stake in the company. “This is a little more than R1.7-billion when calculated at today’s rand/dollar exchange rate,” he writes, quoting a 2017 PIC document detailing its investments.

The Smile investment fell under the PIC’s unlisted investments of the Isibaya Fund, which mostly includes loans and equity investments made to companies with strong Black Economic Empowerment profiles. 

The PIC was not available to comment on Holomisa’s allegations at the time of publishing. Business Maverick will update the article when the PIC comments. Business Maverick was unable to contact Charnley to get her views on Holomisa’s allegations. 

According to Smile’s website, it owns and operates 4G LTE mobile broadband networks and offers nationwide mobile broadband services to its customers.

By the end of 2015, Smile had one of the biggest 4G LTE mobile broadband networks in Africa and continues to expand its network coverage. Its objective is to become the broadband provider of choice in Nigeria, Uganda, Tanzania and the Democratic Republic of the Congo, with over 300 million customers. 

However, the PIC’s investment in Smile hasn’t lived up to its expectations.

In his letter to Mboweni, Holomisa referred to the performance of investments under the PIC’s Isibaya Fund as at 31 March 2017. Over the period, the Smile investment generated a negative 0.03% internal rate of return for the Isibaya Fund. 

Read the document here, which was first obtained by the amaBhungane Centre for Investigative Journalism. 

About the performance of the Smile investment, the PIC said the following: 

  • “FinanciallyUnderperforming — economic headwinds, devaluation of local currencies mainly Nigeria and stiff competition led to underperformance.”
  • “Owner Managed Companies — Corporate governance principles are compromised — Governance policy, Delegation of Authority, succession planning and risk management framework need to be in place.”
  • “Establishment of the Social and Ethics Committee to manage the Representatives of local people on the boards be increased to ensure legislation in countries that advocate local representation on the board.”

Considering that the PIC channeled funding to an entity linked to Charnley, who later became the asset manager’s board member, Holomisa asked Mboweni: 

  1. Were you aware that Charnley had been a PIC beneficiary when you appointed her as an interim board member? If so, do you consider this to be a healthy situation and what were your reasons for continuing with her appointment despite the knowledge?
  2. What was the agreement in terms of the US$100,000,000 investment the PIC made in Smile and has investment paid dividends, especially given the PIC’s 2017 conclusion that Smile was “financially underperforming”?
  3. What were the implications of this lack of performance? Did the PIC write off this investment and if so, would this not constitute mere looting?

The PIC concluded that Smile’s “corporate governance principles are compromised” while the company was squarely under Charnley’s management. Would you agree that this casts doubt on Charnley’s suitability to function at board level?

Charnley said in a statement that the PIC’s 7.69% shareholding in Smile Telecoms Holdings, on behalf of GEPF, is part of its Isibaya Portfolio for Unlisted investments, which was concluded on 3 March 2015, “long before I was appointed to the current Interim Board of the PIC”.

Since the 2016/17 financial year, the PIC has published a detailed schedule of all investments in the Isibiya portfolio.

“The PIC, like any other reputable organisation, requires that all directors and employees who may be conflicted or potentially conflicted must fully declare their interests upfront and, in certain instances, recuse themselves”.

“I have followed all these requirements and has never participated in any board discussions as and when Smile Telecoms were being discussed. Additionally, on my own accord, I have submitted to the PIC an enhanced declaration on the PIC’s investment in Smile,” Charnley said. BM/DM

Story updated to include Charnley’s statement.


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