Report suggests PIC boss probe over allegations
Claims that Public Investment Corporation (PIC) CEO Dan Matjila might have received a R5m bribe from VBS bank should be further probed by the authorities, the report by the investigators into the bank’s collapse recommends.
Advocate Terry Motau, the main author of the investigation commissioned by the Prudential Authority of the SA Reserve Bank and published on Wednesday, says he could not make any “definitive finding” on whether the R5m was paid to Matjila.
“I certainly regard the matter as worthy of further investigation by authorities in due course,” says the report.
The PIC, which invests about R2-trillion on behalf of government pension and other social funds, owns 26% of VBS, which was placed in curatorship in March. The corporation also had two senior executives on the VBS board, both of whom admitted to receiving gratuitous payments of more than R7m to buy their silence on the looting of the bank.
The PIC inherited its shareholding in VBS when it took over the pension fund of the Venda bantustan government.
It subsequently recapitalised the bank in 2002 and again in 2013 and was considering a request for further funding when the bank collapsed.
The allegation around Matjila was made in evidence given by the general manager of the VBS treasury, Phophi Mukhodobwane, who said that during the attempt by VBS to obtain a facility of R2bn from the PIC, he had been instructed by VBS chair Tshifhiwa Matodzi to withdraw R5m in cash from the bank’s Makhado branch and take it by helicopter to Lanseria airport.
Matodzi, who was also chair of VBS majority shareholder Vele Investments, is described as “the kingpin” of the fraud.
At Lanseria, Mukhodobwane met Matodzi, who told him that “the money was to be paid to Dr Dan to obtain his co-operation in the funding of VBS’s requirements by the PIC. Mukhodobwane understood that as a reference to the CEO of the PIC,” says the report. Mukhodobwane, however, told investigators he did not know whether the R5m was actually paid to Matjila and that Matodzi might have used the cash for his own purposes.
In the end, the PIC turned down the funding request.
Asked for comment, Matjila said: “I emphatically reject any suggestion that I may have received R5m to facilitate further funding for VBS Mutual Bank. In fact, the portfolio management committee of the PIC turned down an application to put more money into VBS Mutual Bank, two days before VBS was placed under curatorship.”
Matjila said he regarded the allegations as “malicious” and “without merit”.
Motau’s report also details the evidence of Paul Magula, the former head of risk at the PIC, and Ernest Nesane, the PIC’s head of legal, both of whom sat on the VBS board and admitted to receiving payments of more than R7m to front companies.
Neither was involved in the looting operation but, says the report, they were paid by Matodzi, who was “buying silence from those who could speak the truth”.
Nesane resigned the day after his testimony to investigators, while Magula was fired in April for “poor performance”.
The PIC said on Wednesday it had since successfully applied for both men to be debarred as registered practitioners in the financial sector. It was also in the process of laying criminal charges against them and had applied to have them declared delinquent directors.