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This is likely to be the week from hell for Public Investment Corporation (PIC) CEO Dan Matjila with the United Democratic Movement (UDM) headed to court to force his suspension and Parliament gazetting a bill that decentralises his power.
This couldn’t have come at a worse time for the PIC boss, who faces allegations about various deals done at the state fund manager.
The UDM wants to force Finance Minister Nhlanhla Nene to respond to the party’s request for Matjila to be suspended.
Eric Mabuza, the UDM’s lawyer, said this week that the party would file an urgent application with the Pretoria High Court tomorrow after Nene missed the deadline on Thursday to respond to the request to suspend Matjila.
The UDM has alleged that the rot at the R1.9 trillion-strong PIC might be a bigger example of state capture of its own and wants it included in the state capture inquiry.
The PIC’s major clients are the Government Employees’ Pension Fund (GEPF), which accounts for 88% of the PIC funds, the Unemployment Insurance Fund and the Compensation Commissioner Fund.
The GEPF is a defined benefit fund so the fund’s benefits to its members are ultimately guaranteed by South African taxpayers.
As of March last year the fund had 1.27 million active members and 437 051 pensioners and beneficiaries.
UDM president Bantu Holomisa wrote to Nene earlier this week asking for Matjila to be suspended and for several allegations against him to be reopened.
Holomisa also threatened to take him to court.
Later in the week Holomisa wrote to President Cyril Ramaphosa and Deputy Chief Justice Raymond Zondo, chairperson of the judicial commission into state capture, requesting that the state capture inquiry be expanded to include the PIC.
Requests for comment from the presidency and Judge Zondo’s office were not answered.
“It is therefore the UDM’s urgent request that this matter [PIC] forms part of the inquiry into state capture because of the potential scope of the corruption.
“The commission’s terms of reference could be widened to include these allegations, especially considering that this could be only the tip of the iceberg and that more corruption will be exposed in its investigations,” Holomisa said.
“Because of the sophistication with which this alleged wheeling and dealing in the PIC was done, we suggest that a team of specialist professionals (including, but not limited to, forensic auditors, as well as finance and investment experts), should speedily investigate this matter, before proof of these misdeeds are ferreted away,” he said.
Speaking to City Press, Holomisa pointed out that the UDM was not gunning for the PIC board yet despite them protecting Matjila.
“We are not yet there. For now we just want an independent inquiry,” he said.
According to Treasury, Nene reopened the matter only because of the media allegations.
“This was primarily premised on the allegations that were reported on in the media.
“The former minister of finance [Malusi Gigaba] also wrote to the [PIC] board where he also sought clarity on governance-related matters.
“The minister also requested a response to this letter.”
Nene said he was satisfied with the investigation report received from the PIC board but he was still “considering” it.
He said he was happy with the PIC’s overall performance.
“Yes, the PIC has been performing very steadily in the past few years.
“It has produced a sustained healthy financial performance in recent years and this trend is expected to continue in the period ahead.
“This has resulted in dividend payments to the shareholders in the recent past, a trend that is also expected to continue into the future,” Nene said.
Economic analyst Iraj Abedian said the performance of the PIC was not easy to judge as it had no local equivalent with which to compare.
“It is not easy because none of the asset managers has a portfolio as big as theirs so unless you compare it with other monopoly structures you cannot get a clear picture and currently there is no benchmark with which to compare it,” he said.
Abedian also said the PIC’s actual returns in the past two years had been poor and that could perhaps be the result of poor decision making.
“The allegations against the CEO must be investigated because there is no other way to find out if the decisions were politically or economically motivated,” he said.
Cosatu spokesperson Sizwe Pamla said besides media allegations, the federation did not have further detailed information on the goings-on at the PIC.
“We will reserve our comment because we do not have a proper understanding yet.
“Cosatu looks at the PIC differently because we use a different yardstick and that is why we have a resolution on the PIC about transformation,” Pamla said.
Public Service Association deputy general manager Tahir Maepa said the organisation was happy with the progress and growth under Matjila, despite the few seemingly bad investments, including Steinhoff.
But he said there was also something sinister about the organisation’s unlisted investments and that a lot of powerful people had benefited from those.
“We also believe the allegations against him must be addressed because they keep coming back,” Maepa said.
Bloomberg reported this week that Matjila “will probably be suspended while his role in several questionable investments by Africa’s biggest money manager is investigated, according to three people with knowledge of the matter”.
The probe would consider whether Matjila followed proper procedures when the PIC spent R4.3 billion backing last year’s initial public offering of Ayo Technology Solutions, according to the people, who spoke on condition of anonymity because they aren’t authorised to comment, Bloomberg reported.
The PIC issued a statement on Thursday dismissing reports that Matjila would be suspended as “unsubstantiated allegations as part of a campaign to destabilise the PIC and cause harm to the institution’s reputation”.
“I don’t know anything about a suspension and I am definitely not facing any suspension,” Matjila told Bloomberg.
Deon Botha, the PIC’s head of corporate affairs, confirmed a report that the PIC’s investment committee was probing the Ayo deal to ensure correct investment processes were followed.
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