PIC's Daybreak disaster shows that remedies without accountability won't work
Few institutions hold sway over South Africa's economic future quite like the PIC. Managing nearly R2.7-trillion in assets – mostly on behalf of government employees and social security funds – the PIC isn't just South Africa's largest asset manager. It's also a lightning rod for controversy, especially when investments designed to transform society go sideways.
The PIC's 2024 integrated annual report paints a picture of an organisation committed to transformation and social impact through responsible investing. It boasts that R2.369-trillion of its assets come from the Government Employees Pension Fund (GEPF), and another R149.6-billion and R59-billion from the Unemployment Insurance Fund (UIF) and Compensation Fund, respectively.
Counting eggs
But behind the glossy values and ESG buzzwords lies a troubling pattern: heavy exposure to politically connected individuals and underperforming entities. The Mpati Commission, formally known as the Judicial Commission of Inquiry into Allegations of Impropriety at the Public Investment Corporation (PIC), was established in 2018 to investigate claims of corruption, political interference and governance failures at the PIC.
Chaired by former Supreme Court of Appeal president Justice Lex Mpati, the inquiry exposed a pattern of dubious investments, poor oversight and undue influence over decisions involving billions in public funds.
Most alarming, according to the commission, was the PIC's R1.85-billion exposure to Matome Maponya-linked businesses – including a R1.2-billion deal in 2015 to fund the Afpo Consortium's acquisition of Afgri Poultry, later renamed Daybreak Foods. The commission's final report, delivered in 2020, made 243 recommendations to clean up the institution and restore accountability.
That poultry business is now close to going bust.
Early rot
By 2016, a PIC-seconded CEO described Daybreak as 'technically insolvent' and flagged that the R1.2-billion paid for the business was likely to be a dramatic overvaluation. Despite this, the PIC continued to inject support over the years – even as internal tensions, mismanagement and poor financial oversight persisted.
Fast forward to 2023: a new CEO, Richard Manzini, launches a restructuring plan, aims to boost controls and secures PIC approval for a R250-million facility to upgrade infrastructure and stabilise operations. But in a twist emblematic of public sector inefficiency, the PIC delayed the disbursement.
By early 2025, only R176-million had trickled in – too little, too late. Manzini and other executives resigned in protest. By April, the situation had become catastrophic: salaries went unpaid, feed deliveries stopped and thousands of chickens starved to death.
Chairperson payout as Daybreak burns
Bojane Segooa, the now-former board chair of Daybreak Farms, exited the crisis-hit company in a blaze of scandal last weekend. After reportedly demanding R1.2-million in board fees – and allegedly clashing with CFO Aubrey Dali, who refused to authorise the payment – Segooa walked away with a R625,000 golden handshake.
What other positions has Segooa held?
Segooa is no corporate novice. Her track record includes significant roles in both public and private sector boardrooms. She holds or has held influential board seats at some of South Africa's largest investment and infrastructure entities:
RH Bophelo (JSE-listed healthcare investment firm): Oversaw a cross-listing on the Rwanda Stock Exchange, helped grow NAV from R647-million to R863-million, and drove a 79% increase in investment income. Pushed for gender pay equity and elevated BEE status from level 6 to level 1.
PereSec Prime Brokers (Pty) Ltd (SA's largest stockbroking firm): First chairperson of the Audit and Risk Committee, established governance frameworks aligned with King IV, and initiated transformation measures, including the appointment of African female ARC members.
Broadband Infraco (state-owned broadband operator): Contributed to a strategy securing a R2-billion strategic asset, oversaw R500-million in infrastructure upgrades and ring-fenced R100-million in procurement spend for African female entrepreneurs.
Sources describe her exit as 'strategic abandonment.' She left a gutted company where some 3,400 employees have not been paid, retirement contributions are missing and starving chickens made headlines after the Gauteng Division of the High Court in Johannesburg ordered an immediate halt to their mistreatment.
As of May 2025, more than R1.44-billion in public funds are at risk in Daybreak alone.
The 2024 annual report shows the PIC's portfolio delivered a modest 3.6% growth, with assets under management rising from R2.6-trillion to R2.69 trillion. But, these aggregate numbers mask serious exposure risks.
Risky business
PIC's portfolio is fraught with risks. The top 10 investments, when scrutinised for transparency and risk profile, reveal significant vulnerabilities.
Among the disclosed investments, Eskom bonds top the list with an exposure estimate of R83-billion. This high-risk investment is plagued by Eskom's ongoing debt crisis. Similarly, Transnet debt, once in default and now recently settled, stands at R4.7-billion, with future re-entry anticipated.
Daybreak Foods, currently in turmoil, represents an unlisted equity exposure of R1.44-billion, exacerbated by an additional R250-million in emergency funds. Investments in African Bank and the SA SME Fund also present their own challenges, with exposure estimates of approximately R3.6-billion and R2-billion, respectively.
Undisclosed, not unnoticed
The undisclosed exposures, based on estimates or incomplete public information, add another layer of uncertainty. Investments such as Lanseria Airport, undergoing performance review, and flagship assets like the V&A Waterfront and Mall of Cyprus (via Pareto), remain opaque.
Stakes in venture capital firms such as IDF Capital and Fireball Capital, estimated at R175-million and R250-million, respectively, target high-growth tech sectors but also come with substantial risk.
A hard limit to assessing risk is that the PIC has been less transparent about its private equity and offshore real estate investments compared with its bond and infrastructure holdings. This lack of disclosure makes it susceptible to political influence and instability.
Redemption deferred
PIC CEO Abel Sithole and board chair David Masondo have been quick to affirm that the state asset manager has turned a corner. Of the 243 recommendations handed down by the Mpati Commission, 242 have reportedly been implemented. Governance structures have been reinforced, risk committees recalibrated and the PIC even posted a R141-million dividend to the state – evidence, say executives, of an institution on the mend.
That leadership baton is now being passed on. On 15 May 2025, the PIC confirmed the appointment of former Development Bank of Southern Africa CEO Patrick Dlamini as its next chief executive, effective July 2025.
Endorsed by the Cabinet, Dlamini steps into one of the most powerful roles in South African finance – at the helm of the country's largest equities investor – with a mandate to restore credibility and deepen transformation. His arrival signals continuity in strategy, but also intensifies public expectations of stronger accountability.
But Daybreak's collapse suggests the rot isn't just about compliance – it's about consequence. If nearly R1.5-billion can disappear into a black hole of mismanagement, politically connected deals and ignored red flags, then the risk to the public purse isn't procedural. It's systemic.
What the Mpati Commission diagnosed was institutional capture through relationships and influence. What Daybreak reveals is how little that diagnosis means if no one is held to account.
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