South Africa's deputy finance minister resigns as chairman of the country's largest asset management firm.

Written by Ziad Abdel Fattah:

South Africa's Deputy Minister of Finance announced, David MasondoOn Thursday, he resigned from his position as Chairman of the Board of Directors Public Investment CorporationThe country's largest state-owned asset management company, at a time when the institution is facing increasing investigations into its governance and management.

In a statement, Masondo said he made the decision to resign after careful consideration, confirming his stepping down from the chairmanship of the foundation's board of directors without disclosing further details about the reasons for his decision.

Pressure is mounting on the institution.

The resignation comes amid mounting pressure on the organization, after its chief executive was temporarily suspended pending an investigation into allegations raised by a whistleblower within the organization, coinciding with the opening of an investigation by South Africa’s financial watchdog into governance practices.

The corporation oversees assets exceeding 3 trillion rand.

The Public Investment Corporation is one of the largest asset management companies in Africa, overseeing assets worth more than 3 trillion rand (about $178.3 billion), and managing investments for a number of major government institutions.

The Government Employees Pension Fund is the organization's largest client and is also the largest investor in the Johannesburg Stock Exchange, giving the organization a pivotal role in South Africa's financial sector and capital markets.

The institution has faced governance challenges for more than a decade, with a judicial investigation, the results of which were published in 2020, revealing shortcomings in internal control systems, accountability mechanisms, and investment decision-making processes, with recommendations for reforms to enhance transparency and improve the management of public assets.

Masondo's resignation highlights the growing pressures facing the institution, at a time when South African authorities are continuing their investigations to ensure compliance with governance standards and to protect the funds of investors and government institutions.

South Africa’s central bank kept its key interest rate unchanged at 7% on Thursday, defying expectations of several investors and analysts who had predicted a further interest rate hike after inflation hit a two-year high in June.

The decision triggered a swift reaction in the markets, with the South African rand falling by about 2% against the dollar during today's trading, as investors reassessed their expectations regarding monetary policy.

Read more: South Africa keeps interest rates unchanged despite inflation hitting a two-year high.