Patrick Dlamini has returned to work as chief executive of the Public Investment Corporation (PIC) but the Gauteng High Court judgment that restored him to office has left the institution confronting a more difficult challenge than the legal battle it has just emerged from.

While the court declared Dlamini's precautionary suspension unlawful because the former Board lacked the authority to impose it and failed to follow the required governance processes, it made no findings on the whistleblower allegations that triggered his suspension.

Those unresolved allegations now become one of the first major tests for the newly appointed PIC Board chaired by Seiso Mohai.

Finance Minister Enoch Godongwana has already signalled the direction he believes the Board should take.

Speaking on The Clement Manyathela Show after the judgment, Godongwana said he had advised the new board to refer the whistleblower allegations to an independent institution for investigation.

"An investigation which is done by people who are subjective cannot be correct. I've always maintained a view that Dlamini must not be investigated by the same people who are making allegations against him. It must be investigated by an independent institution."

Godongwana also said the judgment reinforced the need for governance reforms at the PIC and confirmed that Cabinet would soon consider proposals flowing from the Mpati Commission of Inquiry, including replacing the long-standing practice of a deputy minister chairing the Board with an independent non-executive chairperson possessing expertise in pensions, investments and financial markets.

He said the existing governance model created potential conflicts in oversight.

"Another lesson we've learned ... we can't have another Deputy Minister of Finance being the chair because this is going to make it difficult for these officials to conduct oversight over that institution."

The minister stopped short of claiming the judgment vindicated his intervention in the PIC, saying instead that it underscored the importance of protecting an institution that plays a critical role in the South African economy.

"The court has made an important pronouncement ... that the PIC is an important institution in this economy. You can't simply willy-nilly destabilise it and chase the CEO away because it has the potential to destabilise the entire economy."

The High Court's judgment settled only one aspect of the dispute.

Judge MPN Mbongwe found that the former Board had acted outside the authority granted to it under the PIC's governance framework and Delegation of Authority when it suspended Dlamini. The court did not determine whether the allegations against him had merit.

Former PIC chairperson David Masondo has defended the Board's conduct.

Responding to questions from the Mail & Guardian, Masondo rejected suggestions that the previous board had abandoned its defence.

"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."

Masondo said the board had relied on legal advice, supported by senior counsel, and believed it had the authority to impose a precautionary suspension while the whistleblower allegations 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."

Despite the judgment, Masondo maintained that the allegations themselves should still be investigated.

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

The court's ruling has therefore produced an unusual governance situation.

The new board must now work with a chief executive whose suspension has been declared unlawful while deciding how allegations against him should be investigated. At the same time, it will be expected to oversee governance reforms that government says are necessary to strengthen one of South Africa's most strategically important financial institutions.

The debate has already widened beyond Dlamini's reinstatement.

The Black Business Council has backed proposals to amend the Public Investment Corporation Act, arguing that politicians should no longer serve on the PIC board and calling for an independent chairperson with investment expertise.

The Mail & Guardian asked the PIC whether the whistleblower investigation would continue following Dlamini's reinstatement and whether the new board had taken a decision on how it intended to proceed. No response had been received by the time of publication.