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'There is no professional crisis' - deputy finance minister's top 5 quotes at PIC Inquiry

Feb 25 2019 19:02
Fin24

From questions relating to the Ayo transaction and allegations of corruption, Deputy Finance Minister and chairperson of the Public Investment Corporation board Mondli Gungubele was in the hot seat on Monday before the judicial commission into impropriety at the state-run asset manager. 

The hearings resumed in Pretoria and are set to continue until Wednesday.

The PIC is a government-owned investment vehicle that manages some R2trn of state employee pension funds.

Gungubele was testifying for the first time on Monday before the inquiry, headed by former president of the Supreme Court of Appeal, Justice Lex Mpati.

Here are Gungubele's top 5 quotes from his testimony.

1. On the terms of departure of the former PIC CEO, Dan Matjila

"He had cited the fact that the PIC environment was no longer conducive for him and that he could no longer work with a divided board...

"It was after every director in the boardroom expressed their views on the content of the CEO's letter that the Board resolved that it was in the interest of the PIC and in, we believed, his interest, for us to accept this resignation with immediate effect..."

Gungubele testified how the allegations of corruption against Matjila led to a strain among board members. Fin24 reported earlier that Matjila faced a forensic probe regarding the awarding of a loan to a woman who was said be his girlfriend, Pretty Louw.

Matjila was later found not guilty of any misconduct, although there were issues that required "deeper interrogation", according to Gungubele. He resigned in November 2018. 

2. On the AYO transaction

"The AYO transaction completely and blatantly flouted PIC governance and approval processes. Various employees participated in this process, but it is clear that the key event took place on December 14, 2017 when the former CEO, Dr Matjila, signed a subscription agreement for R4.3bn without the requisite authority and or following due process.

"Even the meetings that took place thereafter which tried to ratify this irregularity are null and void, and could not cure this irregular 'key event'."

The inquiry has previously heard evidence on how the R4.3bn cash injection into AYO Technology Solutions was concluded.

AYO is linked to businessman Iqbal Survé, the executive chairman of Independent News Media, who holds an indirect stake in AYO through African Equity Empowerment Investments. Survé once described Matjila as a friend, according to evidence by PIC Assistant Portfolio Manager, Victor Seanie.

3. On the Board's knowledge of the terms of departure of the former Head of IT

"I want to state outright that it is a very questionable agreement. To give background from what I've [been] informed on this matter, Ms Vuyokazi Menye was suspended because there were allegations that she posed a risk to the PIC IT system and at the time, management instituted a forensic investigation into these allegations.

"What is surprising is that this completely changed. Ms Menye was charged with not advising Matjila that he was being investigated by the SAPS for corruption. During the disciplinary inquriy, the parties settled and she was paid an amount of R7m."

4. On the functioning of the board in general

"Directors, including myself, have expressed very strong views on matters relating to the CEO. In fact, where we disagree there would be so much tension {sic}... I want to place on record that outside of the abovementioned matters, the PIC board and its committees have continued to do their work and fulfilled their fiduciary duties.

"Although there might be views that various directors hold about each other and an element of skepticism towards each other, in my view there is no professional crisis."

5. On allegations of Corruption by whistle-blower, 'James Noko'

"Although the allegations against me are unfounded and in fact laughable, I invite any member of the public with any evidence of corruption and impropriety against me to urgently bring it to this commission so that it can be investigated. I have also been asked if I am aware of any impropriety by members of the board. At this point, I am not. I also encourage the public to bring forth any such information."

The inquiry resumes on Tuesday.

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