Former Public Investment Corporation (PIC) chairperson David Masondo says the board never had the opportunity to defend its decision to suspend chief executive Patrick Dlamini because it had effectively ceased to exist before the matter came before the Gauteng High Court.

On Tuesday, the High Court declared Dlamini's precautionary suspension unlawful and invalid, clearing the way for his return as chief executive after finding that the board had acted outside its authority. The court set aside the suspension and ordered the PIC to pay the costs of the application.

Responding to questions from the Mail & Guardian, Masondo said the board's resignation before the hearing meant there was no one to instruct the PIC's attorneys to oppose the application.

"The Board could not present its case. By the time the matter was heard in court, the Board members had resigned and as such there was no one to instruct the PIC attorneys to represent the PIC."

He said the outcome of the litigation was therefore unsurprising.

"The Board had no chance to present its case in court and, therefore, the outcome is not a surprise. The Judge only heard arguments from one side without the benefit of hearing the arguments from the PIC or the Board."

Masondo said the board had obtained legal advice, supported by senior counsel, that it had the authority to suspend Dlamini under the applicable governance framework. He said the precautionary suspension was intended to protect the integrity of the process while serious allegations contained in the whistleblower report were investigated.

"The previous Board had every intention of defending its decision and based on legal advice, held a strong view that it had higher prospects of success."

He said the judgment focused primarily on the Delegation of Authority, whereas the board had considered a broader legal and governance framework in reaching its decision.

Despite the judgment, Masondo said the allegations that prompted Dlamini's suspension should still be fully investigated.

"I remain hopeful that the issues raised in the Whistleblower report will be fully and objectively investigated so as to clear the allegations."

In his judgement, Judge MPN Mbongwe found that the board lacked the authority to suspend Dlamini and had failed to comply with the PIC's governance framework and Delegation of Authority. The court held that the board had not followed the required governance process and could not rely on the whistleblower policy to override those governance requirements.

The ruling does not determine whether the whistleblower allegations against Dlamini are true. Rather, it is confined to whether the board had the legal authority to suspend him and whether it followed the required governance process.

The court also recorded that although the PIC initially indicated its intention to oppose the application, no answering affidavit was filed and the matter proceeded without opposition.

Finance Minister Enoch Godongwana welcomed the judgment, saying it vindicated National Treasury's intervention at the PIC and Cabinet's subsequent appointment of a new board.

In a statement, Treasury said the Minister believed the judgment vindicated the actions taken by National Treasury and Cabinet to restore governance at the PIC, describing those interventions as "good and necessary" after Dlamini's "hasty removal" without due consultation and process.

Last week, the Mail & Guardian reported that a protected disclosure submitted to Parliament raised concerns that the reconstitution of the PIC board shortly before the hearing could affect the corporation's ability to defend Dlamini's suspension. Responding to those developments, Masondo attributed the absence of a defence to the fact that the previous board had resigned before the matter was heard.

The judgment is the latest development in months of governance turmoil at the PIC, including Dlamini's suspension, the resignation of Masondo and six non-executive directors, protected disclosures alleging governance failures, an investigation by the Financial Sector Conduct Authority, and the appointment of a new board chaired by Seiso Mohai.

While the judgment resolves the legality of Dlamini's suspension, it leaves unresolved the whistleblower allegations that prompted it. Those issues now fall to a board that did not suspend Dlamini but must decide whether, and how, the investigation proceeds.