VBS ROT: PIC UNDER FIRE

The departure of two executives from the state-owned pension fund manager in recent weeks is linked to the bank scandal. The FM has uncovered disturbing deals involving these executives

The sudden departure of two executives of the Public Investment Corp (PIC), casualties of the widening VBS Mutual Bank corruption scandal, has raised new concerns over the way in which the continent’s largest pension fund manager is being run.

For PIC CEO Daniel Matjila, this could hardly have come at a worse time, as two political parties — the UDM and the DA — have called for his suspension and a forensic probe into how the institution is being managed.

The PIC played a pivotal role at VBS: besides lending the bank R350m, it also holds a 25.26% stake in the institution. The money this represents all but vanished when the bank was placed under curatorship in March.

Ernest Nesane, the executive legal head of the PIC, resigned with immediate effect last week after forensic investigator Terry Motau notified the PIC of “serious allegations of impropriety” against him. Nesane had been summoned to testify by Motau, who has been tasked with establishing why the bank collapsed.

Back in April, the PIC had fired another executive, Paul Magula, for poor performance, according to the asset manager.

Magula, the executive head for risk management, and Nesane were the PIC’S representatives on the VBS board. Magula chaired the credit committee, while Nesane sat on the risk & compliance committee. Together, they were meant to safeguard the interests of civil servants whose pensions were invested in the bank.

The obvious question is: how did Nesane and Magula fail to notice what curator Anoosh Rooplal has described as a “fraudulent scheme of epic proportions” that led to as much as