Matjila fights for his survival as PIC CEO
• Faces allegation of funding ‘girlfriend’s’ business • Board of directors meets on Friday
Public Investment Corporation (PIC) CEO Dan Matjila is fighting for his future and must on Friday answer allegations made to the board of directors that he used funds reserved for corporate social investment to fund the business of a girlfriend.
He is also facing allegations sent to the board in a letter from a staff member that he irregularly raised salaries of executives and that together with chief financial officer Matshepo More ran the organisation capriciously.
Matjila strenuously denies the claims and in an interview on Thursday said that he would refute them at a special board meeting on Friday. However, if he is unsuccessful in persuading the board he could face a forensic inquiry.
The PIC, which among other government funds manages the Government Employees Pension Fund, is the biggest investor in the economy with R1.7-trillion in assets. It constantly faces intense lobbying from private sector interests, often with strong political connections, to fund private business deals.
The board is appointed by the minister of finance. Of the 10 independent nonexecutive members, three were appointed by the former minister of finance, Pravin Gordhan, in 2014 and reappointed in 2017. Five of the directors were appointed by former minister Nhlanhla Nene.
Finance Minister Malusi Gigaba has appointed two new directors: deputy finance minister Sfiso Buthelezi as chair and businessman Xolani Mkhwanazi as his deputy.
Matjila said he had received a letter from Mkhwanazi last week, asking him to provide his response to the allegations made in writing. Matjila said in the interview that he had met
the woman referred to and that he had turned down two of her projects in the past. The PIC had supported a third project by Mobile Specialised Technologies, which provides mobile health and education training units, in which she was involved as a sales agent and not a shareholder. The PIC sponsored one mobile unit to the value of R5m as a corporate social responsibility project and had extended the company a commercial loan of R21m for expansion.
Matjila said that the salary adjustments of executives had been to bring them in line with others in the asset management industry, according to an independent benchmarking inquiry, and had been done with ministerial approval.
The Star newspaper reported on Thursday that the allegations against Matjila were part of a Gupta plot to take over the PIC.
The report also said Buthelezi and Mkhwanazi planned to return disgraced Eskom boss Brian Molefe to the PIC. Molefe was head of the PIC before Matjila was appointed in 2014.
The claim of a Gupta plot is unverified, with some evidence seen by the Business Day that it is being used as ruse to stir up public sympathy for Matjila.
It is nonetheless clear that the board believes that Matjila has a case to answer.
On Thursday, Buthelezi said the allegation of a plot to oust Matjila was “unfounded, baseless and [was] causing unnecessary panic over an internal matter at the PIC. There are no preconceived plans whatsoever to remove Dr Matjila. The PIC board has indeed called for a meeting on Friday with the CEO, but this is to discuss and get clarification from him on internal matters,” he said.
The PIC board also issued a statement on Thursday, saying it took exception to the claim that its directors had been captured by the Gupta family and were being used to remove Matjila.
“These articles offer no evidence of any of the directors or the board as a whole being linked to the Gupta family, [and] can only be meant to taint the image of the PIC board. We challenge the media to provide us with evidence that links any of the members of the PIC board with the Gupta family,” it said.
As the rumours of disquiet in the PIC gained traction, several lobbyists expressed concern about Matjila’s position.
As well as Thursday’s report in the Star, an article praising Matjila as a gift to the continent appeared in Business Report on Wednesday, also owned by Independent Newspapers.
With Matjila as chief investment officer, the PIC invested R888m in the purchase of the media group by Iqbal Survé in 2013. Of the R888m, 70% sat on the balance sheet of Independent Newspapers in various instruments, while 30% was a direct loan to Survé’s consortium, Sekunjalo.
The EFF, trade federation Cosatu and its affiliate the South African Democratic Teachers Union all issued statements , saying, “hands off” Matjila.