Gigaba, PIC to clear up ‘plan’ to raid pensions
• Gigaba denies SAA requested funds from the PIC • However, SAA confirms it has done so
Finance Minister Malusi Gigaba and the Public Investment Corporation (PIC) board are due to hold a crunch meeting on Tuesday to deal with reports that the government is planning to raid the fund manager to bail out struggling companies under its control.
Gigaba has less than a month to find the R15bn that is desperately needed for airlines SAA and SA Express and the national broadcaster SABC.
The finance minister has also said Eskom needs “soft support”, while other state-owned companies are in need of billions of rand to keep operating.
Bloomberg said this week the Treasury wanted R100bn.
The meeting will deal with what Gigaba calls “untrue, malicious and unconstructive” reports, alleging the Treasury was aiming to raid the pensions of public servants for at least R100bn to bail out struggling state-owned entities.
“No formal or informal request has been sent to the PIC for such funds,” Gigaba said.
However, in July, he told a Cosatu gathering in Boksburg that he could not guarantee that the government would not seek to use some of the PIC funds to bail out struggling state-owned entities. The PIC, which has R1.9-trillion under management, invests the pensions of public servants on behalf of the Government Employees Pension Funds (GEPF).
Gigaba must present a plan in the medium-term budget framework late in October, but at the moment there is no indication where the money may come from.
Three people with direct knowledge of the matter said SAA had applied for financial assistance from the PIC.
They said that in March, before the cabinet reshuffle that led to Gigaba becoming finance minister, the SAA board had mandated management to seek a R6bn loan from the PIC.
SAA board chairman Dudu Myeni had signed off the request on behalf of the board, they said.
Gigaba’s spokesman Mayihlome Tshwete denied that SAA had ever requested funds from the PIC.
The airline company, however, contradicted Gigaba on Monday. Spokesman Tlali Tlali confirmed in a text message that SAA had approached the PIC “earlier this year as one of [the] potential lenders. They indicated that they were due to conduct a due diligence and even came to our facilities. We have yet to hear from them on this.”
Tshwete said the board meeting would also deal with “other pressing issues” that may include the future of CEO Daniel Matjila, who has been fighting to retain his job in the face of allegations of financial impropriety.
“The minister does not sit on the board of the PIC, so he may ask questions and for a report from the board on the matter of the CEO,” Tshwete said.
Matjila and the board have publicly traded numerous allegations, leading to Gigaba releasing a statement on Monday dismissing claims that his department had approached the PIC for funding to help recapitalise SAA and other stateowned entities.
This will be the second of three special board meetings held in September to deal with Matjila, who is seen by some as an obstacle to accessing the R1.9-trillion assets under PIC management. The first was held on September 15, to consider charges that Matjila had irregularly advanced PIC funds to a company owned by an alleged girlfriend of his and other allegations. That meeting ended with the board issuing a statement in which it contradicted itself; expressing “confidence in the ability and integrity” of Matjila, while simultaneously announcing an investigation into the CEO, in order to achieve “completeness of the process and for its final assurance”.
Business Day has seen copies of e-mails containing more allegations against Matjila, from people who call themselves “members of the PIC”.
An e-mail dated September 20 was circulated to the PIC board, Parliament and the GEPF, accusing Matjila of recruiting what it calls “ex SARS rogue unit members” to spy for him.
“We have information and we are whistle-blowing on corrupt activities involving Dr Dan Matjila and Adrian Lackay,” read one of the three e-mails Business Day has seen.
The e-mail concludes with the signature, “Aluta continua, No to corruption”, without offering any of the evidence the authors claim to have. Instead the authors asked a series of
questions about Lackay’s employment at the PIC.
Lackay is the former SARS spokesman embroiled in a labour court battle with SARS, claiming unfair dismissal. He has been adviser to Matjila since he left SARS acrimoniously in February 2015.
The board is also scheduled to consider an investigation report by the fund manager’s internal audit function in a special meeting on Friday.
“They are going to use anything and everything to get Dan [Matjila] out,” said a source.
“I am sure by the end of tomorrow [Tuesday] he will have been suspended. And probably will then be investigated for everything, including deals the ANC brought to him.”
Matjila himself confirmed he was the target of a malicious campaign to remove him because of his refusal to authorise certain transactions brought by “politically connected people.
They are looking for the keys to the big safe,” he told our sister paper, the Business Times on Sunday. In the interview, Matjila said the PIC’s mandate prohibits it from investing in companies that are subinvestment grade.
He mentioned SAA and Eskom as those that would fail to meet the requirements for PIC investment.