Illustrative Image: Patrick Dlamini (Photo: Gallo Images / Sunday Times / James Oatway) | PIC Logo (Image: Sourced / Wikicommons) | G20 Logo (Image: G20 Website) Judge Mandla Mbongwe in the Gauteng High Court did not hold back when he handed down a damning judgment in the urgent application launched by the suspended Public Investment Corporation (PIC) CEO, Patrick Dlamini. The court ruled in Dlamini’s favour on all counts, declaring his precautionary suspension of 13 July unlawful, invalid and of no force or effect, setting it aside with immediate effect.
Because the board bypassed mandatory statutory and contractual prerequisites, the court ruled that “the suspension was, therefore, ultra vires and invalid”.
The judgment contains some of the most severe judicial rebukes of state-owned enterprise board governance in South African legal history:
On the board’s rogue, unilateral conduct: “None of these prerequisites were met. The board acted unilaterally, without ministerial approval, and in disregard of its own policies.”
On the misuse of whistleblower frameworks: “Whistleblower protections safeguard whistleblowers from retaliation. They do not, however, confer powers of suspension on the board.”
On the failure of internal policies to cure illegality: “The board’s reliance on whistleblower principles cannot cure its lack of authority ... internal policies cannot override binding statutory or contractual provisions.”
On the grave public-interest threat of sidelining the CEO: “In the present matter, the invalid suspension of the PIC’s chief executive officer and the sudden resignations of several board members pose a grave threat to the stability of government investments across numerous sectors of the economy.”
The “too ghastly to contemplate” sovereign warning: “The potential destabilisation of the PIC carries with it the risk of massive economic harm to the national economy; harm so profound that it is, in truth, too ghastly to contemplate.”
On the threat of systemic governance collapse: “It is precisely a threatened systemic collapse in these aspects, coupled with the constitutional obligation to protect the economy and uphold good governance, that imbues the present application with the urgency it demands.”
Parting shots
This judgment is, as predicted, an absolute vindication of Dlamini’s legal strategy and a severe condemnation of the previous board’s rogue behaviour.
By attempting to use whistleblower principles as a weapon to bypass the minister of finance, the previous board — under the oversight of Deputy Minister David Masondo — triggered its own destruction, a sovereign rating risk, and a Financial Sector Conduct Authority probe.
But this victory does not dismiss the Acapulco sword hanging over the reinstated CEO’s tenure. There is still the R900-million damages claim against him and all the fiduciary duty questions to be answered. DM
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