UIF bleeding millions

LOSSES: RISKY INVESTMENTS HAVE FUNDS ON ROAD TO 'TOTAL COLLAPSE'

- Roy Cokayne

"Absolutely reckless" use of monies belonging to employees and workers in South Africa has seen the Unemployment Insurance Fund (UIF) and the Compensation Fund lose hundreds of millions through high-risk investments in unlisted companies.

The funds need to be "saved from total collapse", warns Sonja Boshoff, chair of the select committee on economic development and trade.

Boshoff listed three specific investments that resulted in the UIF making losses:

• A R250 million investment in Musa Capital in 2018, which she claims is worth "absolutely nothing" today;

• A R20 million investment in Fountain Civil Engineering in 2015, with 65% of the value of this investment lost; and

• A R2 million investment in Zamalwandle Transport Logistics in 2021, which today is also worthless.

"I cannot understand why we keep on investing and investing and there is no return.

"This is reckless because these monies belong to the employees of this country and the workers have absolutely no say where their monies are invested, which is also a very non-transparent practice from this department [of employment and labour]," she said.

The investments by the UIF and Compensation Fund are managed by the Public Investment Corporation (PIC) based on the investment mandate given to the PIC by these entities.

Tip of the iceberg?

Boshoff apologised for being unable to provide more information about the non-performing investments by these two entities and indicated that she had picked the information she has about these unlisted investments from previous reports.

"If I am going to scratch more, I'm going to find more," she said.

"There must be much, much more incorrectly invested [which does not] bode well for any of the other investments and we know that the PIC is problematic when it comes to investing on behalf of departments.