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The Budlender report into the Public Investment Corporation found that former minister of state security David Mahlobo placed ex-PIC CEO Dan Matjila "under pressure", leading to allegations of impropriety at the state-run asset manager.
The forensic report by Advocate Geoff Budlender was handed over to the board in October, but was not made public until Tuesday, when it was mentioned during proceedings at the PIC Commission of Inquiry.
Budlender probed a series of allegations contained in anonymous emails in September 2017, sent by a purported whistleblower known only as James Nogu.
At the heart of the anonymous emails was the claim that a company called Mobile Satellite Technologies - sometimes referred to by witnesses at the commission as Mobile Specialised Technologies - received a R21m loan and R5m corporate social investment because their business associate, Pretty Louw, was Matjila’s girlfriend.
Africa’s largest asset manager has been rocked by a series of scandals which called into question its ability to manage around R2trn, largely on behalf of government employees. The allegations are being investigated by the Mpati Commission of Inquiry.
The Budlender report was a separate process, commissioned by former finance minister Nhlanhla Nene in July, with narrow terms of reference, to probe the allegations contained in the anonymous emails.
Matjila came under fire for over a year, and offered to resign in November, with several months’ handover period. The board instead decided to accept his resignation with immediate effect.
The Budlender report found no evidence to suggest that Louw and Matjila had been romantically linked and the mysterious email sender failed to provide proof of this.
Budlender further stated that the R21m loan to MST could not have been initiated by Louw, as she only met Matjila in April 2016, and the PIC made its first offer to finance MST before this, on November 23, 2015.
However, the report found that an amount of R438 000 plus value added tax was paid to Louw’s firm, Maison Holdings, in April 2017, after MST had secured R5m from the PIC’s CSI fund, as consulting fees.
Airport meeting
Louw and Matjila were introduced at the behest of Mahlobo at OR Tambo International Airport in April 2016.
Louw originally told the Budlender forensic probe that she met Matjila casually, while in transit. She later admitted Mahlobo introduced them, saying he was a client at her spa and they had been friends at university.
Mahlobo, in giving evidence to Budlender, said he did not have a relationship with her. He contradicted Louw, saying they did not know each other from university, and had first met her at the spa she owned.
Mahlobo was moved from state security to energy in October 2017 by then-president Jacob Zuma. He was axed from Cabinet by president Cyril Ramaphosa in February 2018. He previously came under fire for visiting a different massage parlour owned by a rhino-horn trafficker.
Budlender contended that Mahlobo’ s evidence – that as highly placed government official, he introduced many people to each other – "was untrue in a number of respects".
"There must be more to it than that, but he has not disclosed what that was," the Budlender report stated.
‘Under pressure’
When Louw’s business ran into financial difficulties, Matjila called Lawrence Mulaudzi, a businessperson whose consortium the PIC had recently provided with substantial funding. He asked Mulaudzi to assist Louw.
Mulaudzi understood this as a request, not an instruction, but felt that under the circumstances he had no alternative but to agree and paid Louw R300 000 in his personal capacity, according to the report.
"The reason why Dr Matjila acted as he did was that he felt under pressure as a result of the interventions by then Minister Mahlobo," the Budlender report states.
The Budlender report found that the board’s investigation of the anonymous emails had been "perfunctory" and Matjila did not disclose Mahlobo’ s role, even after he was questioned about it. The board should have been informed that a Cabinet had placed him under "inappropriate pressure", the report added.
It concludes that the PIC exercises considerable power through its investment decisions and clear rules should be adopted to prevent the asset manager from using its financial muscles to favour certain people.
