CEO Dan Matjila throws in the towel at PIC after a year of allegations

The Public Investment Corporation (PIC) announced on Friday that it had accepted the resignation of its embattled CEO, Dan Matjila, following days of speculation the move was coming.

The statement reads: “The Board wishes to state that Dr Matjila has over the years in various capacities served the PIC with dignity and distinction. He has played an integral role in fulfilling the PIC’s vision of meeting and exceeding our clients’ mandates.”

They said his leadership had supposedly grown the asset manager in strength and had allowed it to attract great staff.

They wished him well and hoped he would still “contribute to the country and the continent at large”.

Truths to still emerge

President Cyril Ramaphosa last month published the terms of reference for a judicial commission of inquiry into the PIC that will look at the corruption allegations that have dogged the largest asset managing entity on the African continent and its CEO for more than a year.

The inquiry into the PIC will examine broader governance, corruption and mismanagement issues going as far back as 2015.

The PIC manages investments worth R2 trillion on behalf of the Government Employees Pension Fund and other government funds. Former finance minister Nhlanhla Nene announced the inquiry aimed at fixing governance issues in July 2018.

The terms of reference determined the scope of the inquiry and focus predominantly on whether the investment decisions made by the PIC flouted any policy or law, or benefited a select few.

The PIC made numerous questionable investments under Matjila, such as its more than 25% shareholding in VBS Mutual Bank, which has now been liquidated, and paying R4.3 billion to secure a 29% stake in Iqbal Surve’s Ayo Technologies in December 2017 – which market watchers said was exceptionally overvalued.

The PIC’s trail of dubious transactions is long: it backtracked on its enthusiastic plans to invest in Surve’s tech start-up Sagarmatha, which appears largely to be made up of loss-making businesses, and its investment in Mozambique-based S&S Oil Refinery, in which Nene’s son was involved, according to a Mail & Guardian and amaBhungane exposé.

The inquiry, it was announced, would be headed by former Supreme Court of Appeal judge Lex Mpati, assisted by former Reserve Bank governor Gill Marcus and asset manager Emmanuel Lediga. It is set to produce a final report with recommendations by April 2019.

From a reading of the terms of reference, the inquiry might prominently feature the PIC’s management and board, which was divided on how to deal with corruption allegations surrounding Matjila.

The inquiry will examine whether there was any impropriety regarding investment decisions by the PIC that contravened any legislation and policy which resulted in “any undue benefit for any PIC director, or employee or any associate or family member of any PIC director.”

Other terms of reference left the door open for the inquiry to probe the role of directors at the PIC.

Given the sheer size of its investments and its apparent appetite for BEE investments, the PIC has found itself at the centre of allegations of funding a coterie of politically connected individuals.

United Democratic Movement president Bantu Holomisa has been vocal about businessmen who peddled their influence and use their proximity to Matjila to secure millions in funding from the PIC. In a letter to Ramaphosa earlier this year, Holomisa accused Matjila of personally releasing funding worth R2 billion without approval from the PIC’s board, over an unspecified period, to businessmen with strong ties to the PIC itself and government.

Matjila and the PIC vehemently denied allegations of wrongdoing.

Beyond the role of the board and management, internal issues such as the treatment and protection of whistle-blowers, and whether confidential information of the PIC was disclosed to third parties will also be aired.

This aspect of the inquiry arguably relates to a number of PIC staff members who were fired or resigned in 2017 after being personally investigated by Matjila for leaking information about his alleged misconduct to the media.

(Compiled by Charles Cilliers. Background reporting courtesy of Moneyweb)

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