Public Investment Corporation Act

15 December 2004 No. 27100 THE PRESIDENCY No. 1458 15 December 2004 It is hereby notified that the President has assented to the following Act, which is hereby published for general information:– No. 23 of 2004: Public Investment Corporation Act, 2004. AIDS HELPLINE: 0800-123-22 Prevention is the cure 2 No. 27100 GOVERNMENT GAZETTE, 15 DECEMBER 2004 Act No. 23,2004 PUBLIC INVESTMENT CORPORATION ACT, 2004 (English text signed by the President.) (Assented to I 1 December 2004.) ACT To provide for the establishment of a juristic person known as the Public Investment Corporation and for the transfer of the rights, obligations and assets of the commissioners to the corporation; to provide for the investment by the corporation of certain money received or held by, for or on behalf of the Government of the Republic and certain bodies, councils, funds and accounts; to regulate certain activities of the corporation relating to the management of investments; to repeal the Public Investment Commissioners Act and to terminate the term of office of all the commissioners; and to provide for matters connected therewith. E IT ENACTED by the Parliament of the Republic of South Africa, as B ~ ~ ~ ~ ~ ~ ~ : - - Definitions and interpretation . . . . >, - ,: ;-“. ’;. “ f ~ a r ~ ’ ~ ’ m e a n s ‘ ~ e ’ b o a r d 1. ,(1) In this Act, unless the context indicates otherwise- of directors of the corporation; 5 “commissioners” means the Public Investment Commissioners referred to in , >. . section 2 of the Public Investment Commissioners Act; “Companies Act” means the Companies Act, 1973 (Act No. 61 of 1973); “corporation” means the corporation established by section 2( 1); “department” means the National Treasury established in terms of section 5 of the 10 Public Finance Management Act, 1999 (Act No. 1 of 1999); “deposit” means an amount of money other than that forming part of the National Revenue Fund as contemplated in the Public Finance Management Act, 1999 (Act NO. 1 Of 1999)- (a) which is received or held by, for or on behalf of- 15 (i) the Government of the Republic, including the provinces; or (ii) any body, council, fund or account established by or under law which may, or is required to, pay, in terms of that law, such amount of money to the corporation for investment in terms of this Act; and ( b ) which is not required for immediate use or as a reasonable working balance; 20 and (c) which is not invested or otherwise utilised, in terms of any law, otherwise than in terms of this Act; and (d) which is not invested with the corporation referred to in section 2 of the Corporation for Public Deposits Act, 1984 (Act No. 46 of 1984), 25 and, except for the purposes of section 11(1), includes an amount of money received or held by, for or on behalf of a person or body referred to in that , subsection; “depositor” means any person or body who pays a deposit to the corporation for’ investment on behalf of the person or body, and is for the purposes of the FAIS Act 30 deemed to be a “client” as defined in section 1( 1) of the FAIS Act; “FAIS Act” means the Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002); “financial year” means, in relation to the corporation, a year ending on the last day of March; “Minister” means the Minister of Finance; 35 ’ 4 No. 27100 GOVERNMENT GAZETTE, 15 DECEMBER 2004 Act No. 23,2004 PUBLIC INVESTMENT CORPORATION ACT, 2004 “Public Investment Commissioners Act” means the Public Investment Commis- sioners Act, 1984 (Act No. 45 of 1984); “Registrar” means the registrar or deputy registrar of financial services providers referred to in section 2 of the FAIS Act; “State” means the National Government of the Republic. (2) (a) Subject to paragraph (b), any reference in any law to the commissioners must 5 be construed as a reference to the corporation. (b) Any provision in any law requiring or authorising the investment of an amount of money not required for immediate use or as a reasonable working balance, with the commissioners, must be construed- 10 (i) if such amount of money is a deposit, as a reference to a provision requiring or authorising, as the case may be, the payment of such amount of money to the corporation for investment in terms of this Act; (ii) if such amount of money may or is required to be invested in such a manner that it is required to be repaid on demand, as a reference to a provision 15 requiring or authorising, as the case may be, the investment of such amount of money with the corporation referred to in section 3 of the Corporation for Public Deposits Act, 1984 (Act No. 46 of 1984). (3) (a) Subject to paragraph (b), the provisions of the Companies Act which are not in conflict with this Act apply to the corporation. 20 (b) A provision of the Companies Act does not apply to the corporation in circumstances where- (i) such a provision is clearly inappropriate or incapable of being applied because of a special or contrary arrangement by this Act; and (ii) the Minister declared a particular provision not to be applicable to the 25 corporation. Establishment of corporation 2. (1) There is hereby established a juristic person, an institution outside the public service, to be known as the Public Investment Corporation Limited. (2) The Registrar of Companies must enter the name of the corporation in the register 30 kept in terms of the Companies Act and must issue to the corporation a certificate to that effect. (3) Despite the Companies Act, the Minister, on behalf of the State, must sign the memorandum of association and the articles of association of the corporation. (4) On signature of the memorandum of association and the articles of association in 35 terms of subsection (3), such memorandum and articles must be regarded as complying with the requirements of the Companies Act for registration in terms of the said Act. (5) On receipt of the signed memorandum and articles, the Registrar of Companies must register the said memorandum and articles as contemplated in section 63 of the Companies Act and endorse thereon a certificate to the effect that the corporation is 40 incorporated. ( 6 ) No fees are payable in terms of the Companies Act in respect of the checking of documents, the reservation of name, the registration of the said memorandum and articles and the issue of a certificate to commence business. (7) Sections 32, 54(2), 66,92, 190 and 344(d) of the Companies Act do not apply to 45 the corporation. Share capital of corporation 3. (1) The State is the sole holder of the shares in the corporation. (2) The rights attached to the shares in the corporation, of which the State is the holder, must be exercised by the Minister on behalf of the State. Object of corporation 50 1 ,

4. The main object of the corporation is to be a financial services provider in terms of the FAIS Act. 6 No. 27100 GOVERNMENT GAZETTE, 15 DECEMBER 2004 Act No. 23,2004 PUBLIC INVESTMENT CORPORATION ACT, 2004 Powers of corporation

5. The corporation has all the powers necessary to enable it to realise its objects, including such powers as may be prescribed by regulation, unless expressly excluded or qualified by this Act. Board of directors 5 6. (1) The Minister must, in consultation with Cabinet, determine and appoint the members of the board. ( 2 ) The Minister must, when appointing the board, have due regard to the nominations submitted to him or her by the depositors. (3) The members of the board must be appointed on the grounds of their knowledge 10 and experience, with due regard to the FAIS Act, which, when considered collectively, should enable the board to attain the objects of the corporation. (4) The Minister may issue directives to the board regarding the management of the corporation if- (a) it is in the public interest; or (6) it is reasonably necessary to do so. Board committees 15 7. (1) The board may establish such committees, consisting of directors, as it considers necessary. (2) The board must determine the functions of the committees and the procedure to be 20 followed when the chairpersons of the committees are elected. (3) Any person with expert knowledge of a function of a committee may be co-opted by such committee on such terms as the board may determine, Management of corporation

8. Subject to the provisions of this Act, the board must control the business of the 25 corporation, direct the operations of the corporation and exercise all such powers of the corporation that are not required to be exercised by the shareholders of the corporation. Authorisation as financial services provider 9. (1) The corporation must, in terms of the FAIS Act, obtain authorisation from the Registrar as a financial services provider. 30 (2) Neither the registrar nor the corporation may terminate the authorisation referred to in subsection (1) without the consent of the Minister. Investment of deposits 10. (1) The corporation may invest every deposit or portions of a deposit, with regard to the period, if any, after the expiration of which such a deposit or portions of such a 35 deposit may again become necessary for use, on behalf of the depositor concerned in accordance with the investment policy of the corporation. (2) The board must adopt an investment strategy with guidelines to regulate the investment of deposits and other money referred to in section 11. Amounts of money other than deposits 11. (1) The Minister may, if it is in the public interest, authorise generally or in respect of a particular case any person or body receiving or holding within or outside the, Republic amounts of money other than deposits to pay those amounts of money ob portions thereof to the corporation for investment as if those amounts of money were deposits. ( 2 ) The corporation may receive for investment amounts of money other than deposits and those amounts contemplated in subsection (1). 40 I 45 8 No. 27100 GOVERNMENT GAZETTE, 15 DECEMBER 2004 Act No. 23,2004 PUBLIC INVESTMENT CORPORATION ACT, 2004 Transitional provisions 12. (1) (a) With effect from a date to be determined by the Minister by notice in the Gazette, the commissioners cease to exist as such and the term of office of each commissioner terminates. (b) With effect from the date contemplated in paragraph (a), all of the assets, liabilities, rights and obligations of the commissioners are transferred to the corporation. (c) The board must ensure that the necessary formalities to give effect to paragraph (b) 5 are complied with. (2) The value of the assets and liabilities referred to in subsection (I) must be determined by the Minister after consultation with the commissioners. 10 (3) If any doubt arises as to whether any assets, liabilities, rights or obligations for purposes of this Act pertain to or are connected with the commissioners, the department or anyone else, the Minister must make a determination in this regard. (4) The corporation must be substituted for the commissioners as contracting party in respect of all contracts transferred to the corporation in terms of subsection (l), without 15 such substitution bringing about novation of such contract. ( 5 ) The corporation must, as consideration for the transfer of assets, liabilities, rights or obligations in terms of subsection (I), issue to the State fully paid up shares in the corporation to a value determined by the Minister, after consultation with the corporation, and such value must be regarded as being reasonable consideration for such 20 transfer. (6) No duty, charge, levy or any other tax is payable in respect of the transfer contemplated in subsection (1) and the issue of shares to the State in terms of this Act. (7) All persons who were in the employ of the department immediately before the date contemplated in subsection (1) and who rendered their services exclusively for and on 25 behalf of the commissioners are regarded as having been transferred to the corporation with effect from such date, without any interruption of their service, on terms and benefits not less favourable than those enjoyed by them immediately prior to their transfer. (8) Despite the Government Employees Pension Law, 1996 (Proclamation No. 21 of 30 1996), or any other law, all persons referred to in subsection (7) remain members of the Government Employees Pension Fund referred to in section 2 of the Government Employees Pension Law, 1996. (9) For purposes of the Income Tax Act, 1962 (Act No. 58 of 1962), or any other law in terms of which a tax or levy may be imposed- 35 ( a ) it is regarded that expenses incurred by the corporation in acquiring the assets transferred to it in terms of subsection (1), including the costs of the assets, are equal to the value determined in terms of subsection (2); (b) the assets contemplated in subsection (1) are, for purposes of sections Il(e) and 12C of the Income Tax Act, regarded as having been brought into use for 40 the first time at a cost equal to the value determined in terms of subsection (2); and it is regarded that no change of employer took place in respect of an employee referred to in subsection (7). (c) (10) Any legal proceedings that were pending or could have been instituted by or 45 against the commissioners prior to the establishment of the corporation may be continued or instituted by or against the corporation, subject to any law governing prescription of debt. (11) Despite the repeal of the Public Investment Commissioners Act by section 18, anything done in terms of that Act which may be done under or in terms of this Act 50 continues to be valid and of full force and effect. Dividends

13. The declaration of dividends must be authorised by the board and approved by the Minister. 10 No. 271OO GOVERNMENT GAZETTE, 15 DECEMBER 2004 Act No. 23,2004 PUBLIC INVESTMENT CORPORATION ACT, 2004 Winding up of corporation

14. The corporation may not be wound up except in terms of an Act of Parliament. Use of name of corporation

15. No person, association, corporation or other statutory body or company may carry on business or be registered under an Act of Parliament with a name identical to that of the corporation, or resembling the name of the corporation, or any shortened form of the name of the corporation, to such an extent that it is deceptive. 5 Regulations

16. The Minister may, by notice in the Gazette, make regulations with regard to any matter which is necessary to prescribe for the proper implementation or administration 10 of this Act. Repeal of law

17. The Public Investment Commissioners Act, 1984 (Act No. 45 of 1984), is hereby repealed. Short title and commencement 15

18. This Act is called the Public Investment Corporation Act, 2004, and comes into operation on a date fixed by the President by proclamation in the Gazette.