PIC wins court bid to have two former VBS directors declared delinquent
State asset manager the Public Investment Corporation (PIC) has welcomed a high court decision to have two former executives implicated in the VBS Mutual Bank collapse declared delinquent directors.
The Pretoria High Court last week declared Ernest Nesane and Paul Magula delinquent directors. Being declared delinquent means they are disqualified from serving as directors, according to the 2008 Companies Act.
Nesane was the PIC's former executive head for legal counsel, governance and compliance. Magula was the corporation's former executive head for risk management.
The corporation manages about R2.2-trillion in investments on behalf of public servants.
The PIC dismissed Magula in April 2018 following a disciplinary process. Nesane, meanwhile, resigned in July 2018 two days after he testified before Advocate Terry Motau, SC, who was investigating the VBS collapse on behalf of the South African Reserve Bank.
"The PIC Board believes that the order to declare both Nesane and Magula delinquent is an important message to all directors to take their fiduciary responsibilities seriously and emphasises the point that unethical behaviour on the part of leadership should not be without consequences," the PIC said in a statement on Monday.
"The decision comes at a time when the interim Board is hard at work to restore confidence and accountability at PIC."
In March 2019, both Nesane and Magula were disbarred by the Financial Sector Conduct Authority, following the PIC's application.
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