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South Africa’s PIC Defends Nedbank CEO Amid Race Criticism

April 11, 2012

South Africa’s Public Investment Corp., which oversees $125 billion of government pension funds, defended Nedbank Group Ltd. (NED) Chief Executive Officer Mike Brown after the government attacked the lender for failing to have a black or female CEO.

Brown has “made a positive contribution to the group” and has the confidence of the PIC, the Pretoria-based fund manager said in an e-mailed response to questions today. The fund owns 7 percent of Nedbank, according to data compiled by Bloomberg.

The PIC defended Brown after the government criticized Nedbank Chairman Reuel Khoza on April 9 for not doing enough to transform the leadership of the bank. Khoza, who is black, had challenged the country’s political leadership in the lender’s annual report. Gwede Mantashe, secretary-general of the ruling African National Congress, dismissed Khoza’s criticism on April 3, saying Nedbank should focus on business, not politics.

“The PIC still has confidence in Mike Brown to transform the business further,” Deon Botha, corporate governance specialist at PIC, said by e-mail. The PIC hasn’t come under government pressure to sell its stake, Botha said, adding that the lender’s shares have outperformed competitors.

Nedbank, which is controlled by Old Mutual Plc (OML), is the best-performing of South Africa’s four largest banks this year after the stock climbed almost 15 percent. In 2011, the lender advanced more than 11 percent.

Black Empowerment

South Africa is pushing companies to train and promote black employees to compensate for discrimination during apartheid, which ended in 1994. Nedbank ranks on the same level as its competitors in finding black investors, promoting black staff and buying services from black suppliers, the PIC said.

“The bank is as strong as what it was before the chairman’s statement,” Rene van Wyk, South Africa’s Registrar of Banks, said today. The debate around Khoza’s report won’t “have a long-term effect as Nedbank has always had a good relationship with government,” the regulator said.

Jimmy Manyi, the government spokesman who distributed the April 9 statement, declined to comment today. Tabby Tsengiwe, a Nedbank spokeswoman, didn’t immediately respond to an e-mail or a telephone message left at her office.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at

To contact the editors responsible for this story: Edward Evans at

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