Gi­gaba al­lies have knives out for Dan

CEO says cam­paign against him is a ploy to get Zup­tarite hands on its R1.9-tril­lion

Sunday Times - - FRONT PAGE - By CHRIS BAR­RON

Pub­lic In­vest­ment Cor­po­ra­tion boss Dan Matjila be­lieves he is in the crosshairs of pow­er­ful peo­ple who want ac­cess to the R1.9-tril­lion of pen­sion money he man­ages on be­half of gov­ern­ment em­ploy­ees.

“I’ve got the keys. They’re look­ing for the keys to the big safe,” Matjila says. This is af­ter he was hauled be­fore the PIC board last week to an­swer al­le­ga­tions against him that were leaked mys­te­ri­ously af­ter he turned down a re­quest from SAA chair­woman Dudu Myeni for a R6-bil­lion loan to keep the bank­rupt na­tional car­rier from go­ing un­der.

In an as­ton­ish­ingly frank in­ter­view this week, Matjila told Busi­ness Times he be­lieved there was a con­nec­tion. He said sev­eral re­quests for trans­ac­tions that did not meet the PIC’s in­vest­ment cri­te­ria had been made by “po­lit­i­cally con­nected peo­ple”.

He said al­though the ma­jor­ity of the board had ac­cepted the com­pre­hen­sive doc­u­men­tary ev­i­dence he pre­sented, which proved his in­no­cence of the al­le­ga­tions against him, the chair­man and vice-chair­man, both re­cent Fi­nance Min­is­ter Malusi Gi­gaba ap­point­ments, in­sisted on an in­ter­nal au­dit. This sug­gested very strongly that there was an­other agenda at work. “It tells you there’s a plan on the ta­ble to try and re­move me.”

He be­lieved that at­tempts to get rid of him would in­ten­sify as the ANC’s elec­tive con­fer­ence ap­proached.

“It may be al­most im­pos­si­ble for them to have this op­por­tu­nity when the po­lit­i­cal lead­er­ship of the party has changed,” he said. “There is a lot of des­per­a­tion and there is ur­gency to deal with this quickly.”

Pub­lic In­vest­ment Cor­po­ra­tion CEO Dan Matjila says he is be­ing tar­geted by peo­ple who want to re­move him so that they can have “eas­ier” ac­cess to the R1.9-tril­lion the PIC con­trols, mainly on be­half of the Gov­ern­ment Em­ploy­ees Pen­sion Fund.

He ap­peared be­fore the board last week to an­swer al­le­ga­tions against him that he be­lieves were leaked as part of a “plan” to get rid of him.

“For me the mo­ti­va­tion is clear. To try and re­move me.” Why? “I’ve got the keys. They’re look­ing for the keys to the big safe.”

His re­fusal to au­tho­rise cer­tain trans­ac­tions has up­set “po­lit­i­cally con­nected peo­ple”, he says.

“That’s what it is. There are lots of times where we re­ject trans­ac­tions be­cause they don’t meet our in­vest­ment cri­te­ria. Some of those who want us to do the trans­ac­tions have po­lit­i­cal con­nec­tions, and it be­comes very frus­trat­ing for them when we are un­able to help them. They try to use po­lit­i­cal pres­sure, and it doesn’t work.”

Dudu Myeni fu­ri­ous

Four weeks ago he re­jected a re­quest for a R6-bil­lion loan for SAA from the chair­woman, Dudu Myeni. Myeni, a close friend of Pres­i­dent Ja­cob Zuma, whose now bank­rupt foun­da­tion she also chairs, was re­port­edly fu­ri­ous.

Al­le­ga­tions against Matjila were sub­se­quently leaked to the board.

He says he ex­pects that ef­forts to re­move him will in­crease.

“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 has changed,” he says.

“There is a lot of des­per­a­tion and there is ur­gency to deal with this quickly.”

He be­lieves this is what the al­le­ga­tions against him are about — and the board’s in­sis­tence on pur­su­ing them.

“To me they’re re­lated. We have given a com­pre­hen­sive re­sponse to the ques­tions we were asked, and we just didn’t un­der­stand why the board now wants to check the com­plete­ness and cor­rect­ness of our sub­mis­sions.

“We have shown com­plete records of where the money went that they claim went to my so-called girl­friend.”

The ma­jor­ity of direc­tors were sat­is­fied with his ev­i­dence. But the chair­man, Deputy Fi­nance Min­is­ter Sfiso Buthelezi, and the deputy chair­man, Xolani Mkhwanazi, both ap­pointed by Fi­nance Min­is­ter Malusi Gi­gaba, in­sisted that the al­le­ga­tions be re­ferred to an in­ter­nal au­dit.

“When we’ve pre­sented ad­e­quate ev­i­dence and they con­tinue with this it tells you that there’s a plan on the ta­ble,” says Matjila.

The PIC has been linked to plans by the Na­tional Trea­sury to use the sale of the gov­ern­ment’s shares in Telkom to plug a R10­bil­lion hole at SAA.

Be­low in­vest­ment grade

Matjila says that if the PIC were ap­proached to buy Telkom shares, it would be an in­vest­ment de­ci­sion and would have to fit into the pa­ram­e­ters that its clients have set.

But he says that un­der his lead­er­ship the PIC will not use the funds it has been en­trusted with to bail out SAA.

“We have been quite clear about that. It does not meet our in­vest­ment stan­dards. Our clients them­selves have made that pro­nounce­ment that they wouldn’t al­low us to put money in an as­set that is be­low in­vest­ment grade.

“If we buy Telkom we’ll be buy­ing an as­set that we be­lieve in. If we were told to put money into an SAA type of as­set we would not do that.

“It would not be ap­pro­pri­ate to fi­nance SAA if they have not sorted out the gov­er­nance is­sues there, and if they don’t ex­e­cute an ap­pro­pri­ate turn­around plan. Un­for­tu­nately [for SAA] this means they have to build a num­ber of data points to show that they are suc­ceed­ing.”

If the gov­ern­ment was able to sup­port it “to a point where they turn it around and it be­comes in­vest­ment grade, we will con­sider it at that point. The chal­lenge is how do they make it an in­vest­ment-grade as­set? There will have to be an in­ter­ven­tion from gov­ern­ment and that will re­quire money.

“That money will have to be raised some­where. But not from us, un­til there is clear ev­i­dence of a turn­around.” Would this in­clude the re­moval of Myeni? “The gov­er­nance needs to be sorted out, and for this the right lead­er­ship is crit­i­cal. We ex­pect the right gov­er­nance ap­proach to be taken at SAA.”

‘Lots of rounds be­fore De­cem­ber’

He says the PIC’s po­si­tion on SAA has been com­mu­ni­cated to the fi­nance min­is­ter, “but not of­fi­cially”.

In spite of this, Gi­gaba told Cosatu re­cently that he can­not guar­an­tee that the gov­ern­ment will not use PIC funds to re­cap­i­talise state-owned en­ter­prises, in­clud­ing SAA.

“Un­for­tu­nately SAA does not meet the cri­te­ria set by our clients,” says Matjila. “So we will not be able to in­vest.” The same goes for Eskom, he says.

“The min­is­ter can­not in­struct the PIC to in­vest in a par­tic­u­lar way.”

Matjila says al­though sys­tems and pro­cesses dic­tate what the PIC can and can­not do with clients’ money, his po­si­tion as CEO is “key”.

He says his re­moval from the PIC would make the cap­ture of the PIC and the funds it con­trols eas­ier, “be­cause then you could get stuff ap­proved that is not com­pli­ant with the man­date, or you can start fid­dling with the pro­cesses and cri­te­ria to make it eas­ier for some trans­ac­tions to go through”.

He says this is why “some peo­ple” want him out of the way. Does he feel his po­si­tion is vul­ner­a­ble? “I would be naive to think that I’m safe, quite frankly. I feel this is only round one. There will still be lots of rounds be­fore De­cem­ber, and lots more mud thrown at me.

“We still have a long way to go.”

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 Dan Matjila Pub­lic In­vest­ment Cor­po­ra­tion CEO

PIC CEO Dan Matjila

Pic­ture: James Oat­way

‘I’ve got the keys. They’re look­ing for the keys to the big safe,’ says PIC CEO Dan Matjila.

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