For what it's worth, permanganate is an extremely strong oxidizer (probably the second strongest stable solid oxidant known, after persulfate), but at neutral pH it is unable to oxidize chloride to hypochlorite and beyond. (The electrode potentials are too close, and anyways the maganese dioxide byproduct turns hypochlorite to chloride and oxygen.) Instead of reacting with a reducing agent in water, (the main possibilities are simple organics and ferrous iron, and these turn to carbon dioxide or insoluble ferric oxide [sidenote: this is why permanganate is added to water in the first place]) permanganate tends to break down to oxygen and manganese dioxide, which settles out.