Another PIC boss in capturers’ crosshairs
Are South Africans about to see the back of another black CEO from one of the strategically important public institutions? All indications are that it’s just a matter of time before Daniel Matjila is forced out of the Public Investment Corporation (PIC), in circumstances not dissimilar from those of his predecessor, Elias Masilela.
Masilela’s departure was heartless but it was by no means atypical of how black talent is treated in this city once they fall out with the dominant faction of the governing elite. Ask Papi Molotsane, Pinky Moholi, Paul Baloyi, Siza Mzimela, Inati Ntshanga, Reuben September, Jacob Maroga, Brian Dames, Monwabisi Kalawe, Dali Mpofu and Tseliso Matona.
The affable Masilela’s axing, via a media release, came after a series of events including internal wrangling and his alleged refusal to back a particular transaction that came highly recommended from the political high-ups but didn’t seem to pass commercial muster.
The pattern in all these departures is the same: it starts with clashes with shareholder representative ministries (representing a dominant faction of the governing elite), followed by meddling by the faction and then develops into full-blown war in the courts and/or summary dismissals.
A friend who works in a large parastatal characterises this as tantamount to being tossed into a malfunctioning washing machine.
For weeks, there has been a swirl of rumour regarding alleged impropriety around Matjila, formerly the PIC’s chief investment officer before his elevation to the top job.
The PIC manages nearly R2-trillion worth of public servants’ pensions and other public funds and invests in, and earns returns from, listed and unlisted entities.
The latest allegations, including suspected financial misconduct and nepotism, are too grubby to repeat here. Internally, Matjila is facing something of a revolt over his leadership style, which, if he survives this round, he will have to deal with.
As often happens with these things, the allegations made their way into the media while the board was still wringing its hands about what, if at all, to do with them.
Cosatu, the Federation of Unions of SA and the EFF issued statements, condemning the move to oust Matjila as part of a wider plot to capture the corporation.
The Treasury, which acts as the custodian of the PIC (the deputy finance minister is ex officio chairman of its board), has denied suggestions that there is a plot to axe Matjila. Separately, and more broadly, the PIC has been linked to controversial moves to recapitalise South African Airways by getting it, among other things, to buy the government’s stake in Telkom, enabling the state to use the proceeds to plug a R10bn hole at the airline.
Like other state-owned corporations, the PIC hasn’t been spared accusations that it has tended to support transactions of politically connected business people. And despite its financial muscle, it has been slow to advance the transformation of the asset management sector.
Therefore, it would be a mistake to think that Matjila is blameless. Still, if anything, the latest push against him is probably the result of factional battles of the governing party.
Last Friday, the board, clearly unprepared for this crisis, held a meeting in which it offered Matjila a chance to explain himself. Afterwards, it expressed its “confidence in the ability and integrity of the CEO, Dr Daniel Matjila, management and staff of the PIC” and said he had addressed the allegations levelled against him. So far, so good! Then came this line: “For completeness of the process and for its final assurance, the board mandated the internal audit division of the PIC to independently review the representations made by the CEO.”
This did none of the protagonists any favours. Despite its protestations that it will execute its fiduciary duties without fear or favour, the board is coming out as indecisive and spineless.
The throwaway line raises questions. Was Matjila really cleared of any wrongdoing? If yes, why then a need for assurance? Who will carry this out? What are its terms of reference? Will Matjila stay on the job while this is ongoing? Will its results be published?
If the board was genuinely interested in a fair and credible fact-finding process, it would have commissioned an independent inquiry in the first place and, for his own protection, asked Matjila to take special leave while this was under way. This piecemeal inquiry smacks of the diversionary tactics employed by KPMG.
For Matjila, the unfolding process is likely to be as gruesome as undergoing open-heart surgery without a shot of brandy.
A FRIEND WHO WORKS IN A LARGE PARASTATAL CHARACTERISES IT AS TANTAMOUNT TO BEING TOSSED INTO A MALFUNCTIONING WASHING MACHINE