State’s investment pile now a target for new set of looters
Once “they” decide they are gonna get you, they get you. That’s the way it is in politics; just ask John Oliphant, who was once the head of the Government Employees Pension Fund (GEPF); Wolf Meyer, who was chief financial officer of South African Airways; or Tshediso Matona, who was briefly CEO of Eskom.
All three were pushed out of their jobs unfairly, despite their competence and with no real findings made against them. Is Public Investment Corporation (PIC) CEO Dan Matjila next to get the chop?
Fortunately for Matjila, though, the political actors who want him out have lost significant power in recent months. It is no longer easy to cajole a board into acquiescence through spurious investigations by friendly auditors and to cast a shadow over someone’s name so that they are worn down and walk away.
Matjila manages R1.9-trillion in government pension fund money and other social funds. He is at the head of the biggest investor in the economy which, on average, holds around 10% of every JSE top 40 company. The PIC also has an unlisted portfolio — making up 30% of its portfolio — with all manner of smaller, more discretionary investments.
This makes it an all-year-round Father Christmas. A large number of private transactions that apply for funding are viable investment propositions. The question is who and how to choose among them?
Many are lobbied for politically, which also stands to reason as transformation of the economy is a widely shared social objective and a mandate of the PIC. This makes the conundrum even deeper and the unsuccessful are as certain to cry foul as the successful are to claim superior acumen.
Matjila has a good reputation and has been heard to complain increasingly in recent years about the mounting political pressure he faces. While there have been some odd deals — funding Iqbal Survé’s Sekunjalo consortium to buy Independent Newspapers can hardly be called a commercial success — generally he has for the most held the line and chosen investments that can deliver an inflation-beating return.
There has certainly been no evidence that the Guptas have managed to get a foot in the PIC’s door.
But last Friday was Matjila’s day of reckoning. Over the previous week, allegations with a dubious origin — a fake news website linked to former convict Kenny Kunene — reached the board, alleging that Matjila had funded a project belonging to a woman who was allegedly his girlfriend. He was also presented with a letter from a member of staff, alleging a litany of improprieties related to executive remuneration.
By several accounts of the meeting, Matjila did well. With the exception of two individuals, the board rallied around him and he survived to fight another day. Only newly appointed deputy chairman Xolani Mkhwanazi and new chairman Sfiso Buthelezi wanted to indulge the complaints after Matjila had provided a written explanation. Both are Finance Minister Malusi Gigaba’s new appointments to the board.
WHILE LAST WEEK’S CHALLENGE FAILED, ANOTHER WILL EMERGE AT SOME POINT. IT IS JUST A MATTER OF TIME
The plan, which had been to get the board to agree to a forensic inquiry — probably in the hope that something would come up — failed and all that was agreed was an inquiry by internal audit headed by Sandra Beswick, considered independent of the factions.
But the PIC — like GEPF when Oliphant was pushed out — is now factionalised, with some staff for Matjila and others against; and some board members for him and others against. This is precisely what happened when Oliphant was removed; dysfunctionality and factionalism in the organisation got him in the end, and Matjila is going to have to make very certain he has all the staff on side.
While last week’s challenge failed, another will emerge at some point. It is only a matter of time.
Meanwhile, Kunene and his colleague Gayton McKenzie, another former convict turned BEE-entrepreneur, who have again shot to prominence in politics and business in the past few months, have been dubbed “the new Guptas” by the Sunday Times. It’s a tag that they furiously disputed, but all the telltale signs are there: sleaze, fake news and brand-new deals with state-owned companies.
With the Guptas game now more or less up, new hyenas will come to the fore. The PIC, as always, will be the top prize for those who want to loot the country.