PIC board fractured over ex-CEO corruption claims | Fin24
 
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PIC board fractured over ex-CEO corruption claims

Jan 29 2019 20:17
Sibongile Khumalo

The Public Investment Corporation (PIC) board was deeply divided over the handling of allegations of corruption against its former chief executive Dan Matjila, the Commission of Inquiry into the affairs of the corporation heard on Tuesday.

Claudia Manning, who resigned from the PIC in July 2018, also stated that leadership changes in the board of the asset manager, which handles the pensions of public sector employees, had brought instability, with three chairmen in a period of less than three years.

The board of the PIC is chaired by the deputy minister of finance and the changes were caused by changes in the portfolio, which has been affected by the Cabinet reshuffling.   

Allegations of corruption against Matjila by emanated from a R21m loan to MST, a company linked to a woman said to be romantically involved with Matjila, prompting the United Democratic Movement (UDM) to seek an order to get the minister of finance to suspend Matjila and an independent probe into the MST payment.

"The board had been fractured along a particular line on how to deal with allegations of corruption against the CEO," said Manning. "It was the board’s decision to oppose the application…but it appeared that the chairman was agreeing with the UDM."

Board 'applied its mind'

Matjila had dismissed the UDM application as "frivolous" and baseless, saying that the matter had already been dealt with by the board, which found him not guilty of any misconduct.

Manning testified that the majority view was that the board had "applied its mind to the facts of the matter with diligence and had made a legitimate decision on how to react to these allegations", while the minority believed that the matter had not been handled appropriately by not suspending the Matjila and conducting an independent inquiry.

The board had called Matjila to explain the allegations and who, according to Manning’s evidence, led to them to believe that the allegations were without any basis and that the MST transaction had adhered to internal processes.

'Tumultuous, polarised'

Manning said it later emerged that the board Chairman, Deputy Finance Minister Mondli Gungubele, "had taken a view that board had had acted wrongly in its response to the corruption allegations against the CEO, and that the only thing that would satisfy him would be to appoint an independent investigation into those allegations."

Manning described the period between September and December 2017, as  being "tumultuous" for the PIC, creating a "tense and polarised environment at the board".

"Both the board and the management was devoting considerable attention to managing the crisis, rather than on the core business of the PIC," she said.

Matjila resigned as chief executive in November 2018.

The commission will on Wednesday hear evidence from a witness whose identity will only be revealed on the day, before adjourning until late February.

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