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The Unemployment Insurance Fund (UIF) has noted an article published by the Daily Maverick on 17 July 2022, bearing the headline “Bounty Brands’ ‘dodgy’ dividend: R530m from doomed UIF investment flowed to shareholders’ offshore accounts”.

The article creates an impression that the UIF made a reckless investment that sought to bankroll an ailing company in Bounty Brands. This is not correct.

The UIF wishes to state the following facts: The UIF has granted the Public Investment Corporation (PIC) an investment mandate. The mandate is diversified across different asset classes that include inflation linked bonds, listed equities (both local and foreign), cash and money market, socially responsible investments, or Developmental Investments (DI).

In terms of this mandate, the PIC is required to make investments on behalf of the UIF, provided these meet the criteria contained in the investment mandate. The PIC runs its own investment processes, which we have been assured, include thorough due diligence of all envisaged transactions..

The PIC regularly reports to the UIF on the performance of its investments and the successes and challenges faced by some of these investments, as such we have been informed of the problems arising from the investments in Bounty Brands. The UIF understands the risks associated with investments, however, it deplores the alleged malfeasance in Bounty Brands. 

The challenges at Bounty Brands does not reflect the performance of the UIF’s overall investment portfolio, which has remained sustainable during difficult global and economic conditions in recent years, including during the COVID-19 pandemic.

“Through investments made by the PIC, the UIF portfolio which stood at R 160 billion in March 2020 played a crucial role when the country was placed under strict lockdown in response to the COVID-19 pandemic. Through the  Covid – 19 TERS intervention about R 61 billion was paid as wage support to more than 250 000 employers resulting in relief to more than 5 million workers. The portfolio has shown resilience as it has bounced back from around R 100 billion last year to the current R 115 billion”, said UIF Commissioner, Teboho Maruping. 

The UIF understands that the PIC has instituted investigations into these Bounty Brands investments, and UIF Commissioner together with the chairperson of the UIF advisory Board will be meeting the PIC leadership to discuss the latest developments pertaining to this investment. “The UIF will continue to exercise oversight over the PIC’s investment activities through the established governance structures and processes”, said Maruping.

Issued by Department of Employment and Labour