BEHIND THE ROT
Something is wrong at the PIC. The finance minister is deeply concerned about its governance, its CEO believes he is a target of state-capture crooks and its chair thinks the board is on shaky ground
Much like a bank robbery shootout in a darkened street, the unfolding drama at the Public Investment Corp (PIC) has left many observers not entirely sure of who the bad guys are — and equally uncertain over who has control of the loot.
The PIC manages almost R2 trillion in government employees’ pension and other funds, making it a powerful economic player. Finance minister Nhlanhla Nene knows that uncertainty over its leadership and governance — particularly after revelations of its shockingly ill-advised investment in VBS Mutual Bank — poses a significant risk to the fiscus. “I am deeply concerned about the alleged governance problems at the PIC and I am acutely aware that these require urgent attention and resolve,” Nene states in court papers filed this month.
Nene is opposing a UDM court bid to force him to suspend and investigate PIC CEO Dan Matjila over historic claims that he used his position to financially benefit his alleged girlfriend.
But, as Nene’s 23-page affidavit makes clear, that opposition is by no means an endorsement of either the PIC or Matjila. Court documents also reveal that the minister asked the PIC board in May “to advise whether disciplinary steps, including precautionary suspension against [Matjila], and other executives, were warranted”.
“I admit that there are allegations of misconduct against the CEO, in his position as CEO of the PIC. These allegations are receiving urgent attention and priority,” Nene says in his response to the UDM.
He adds: “The UDM’S case is aimed at the CEO. The minister’s concern is the overall executive and strategic leadership of the organisation.
“There should be a delicate balance between ensuring the financial stability of the PIC and dealing with [its] prevailing governance issues, including the allegations against the CEO or members of the executive.”
Matjila’s difficulties began in September last year, when someone known only as James Nogu sent an e-mail to PIC staff, in which he alleged that Matjila had used his position to financially benefit his lover.
In an affidavit filed earlier this month, Matjila denies any suggestion that Nogu is a whistleblower and describes him as “a thug who first made contact with me telephonically and threatened that he will send the e-mails prior to September 5 2017”. He has denied that he was romantically involved with Pretty Louw, the woman described by Nogu as his girlfriend.
Just days after the PIC board held an emergency meeting over the Nogu allegations, Matjila gave an extraordinary interview to the Sunday Times, in which he claimed to be the victim of a “smear campaign”.
The Sunday Times story stated that Matjila had been “hauled before the PIC board ... to answer allegations against him that were leaked mysteriously”. The report says this was after Matjila turned down a request from SAA chair Dudu Myeni for “a R6bn loan to keep the bankrupt national carrier from going under”. Myeni was reportedly “furious”.
“I’ve got the keys. They’re looking for the keys to the big safe,” Matjila was quoted as saying.
Matjila’s claims, made as SA reeled from growing evidence of the “capture” of state-owned enterprises, were explosive and panic-inducing. But they were quickly met with denials by then finance minister Malusi Gigaba and Matjila himself.
At a joint press conference two days after the story appeared, Matjila dismissed it as “distasteful, inaccurate and designed to drive a wedge between the minister, myself and the board”.
While the Treasury admitted that SAA had asked the PIC for a R6bn loan in May last year, directorgeneral Dondo Mogajane said the corporation had done due diligence on the airline, but the carrier fell short of the money manager’s investment criteria.
Matjila didn’t expand on how he claimed his comments were misconstrued by the Sunday Times, saying he would issue a statement to clarify the matter a few days later. He never did.
Business Times then released the transcript and recording of the Matjila interview, in which he is asked what he thinks the purpose of the “smear campaign” against him is.
“For me the motivation is clear. To try [to] remove me. Or frustrate me to the point where I resign.”
He later adds: “What is being said out there is that every day that I am around here is an opportunity lost for those who want these funds. And the potential changes in December — some of them are saying — if we don’t deal with him we don’t know what changes are going to happen.
“It may be almost impossible for them to have this opportunity when the political leadership of the party [the ANC] has changed.”
Matjila denies that he was romantically involved