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Deputy Finance Minister Mondli Gungubele has been subpoenaed to provide evidence in a case of corruption against the leadership of the Public Investment Corporation (PIC).
Lufuno Nemagovhani, the PIC’s executive head of internal auditors, has also been subpoenaed to provide evidence to the Pretoria Magistrate’s Court, including minutes of PIC board meetings, two years’ worth of PIC CEO Daniel Matjila and chief financial officer Matshepo More’s emails, as well as investigative reports the state-owned asset manager was supposed to have commissioned last year to exonerate Matjila from allegations that he channelled money to an alleged romantic partner.
Like all previous deputy finance ministers, Gungubele is automatically the chair of the PIC and he has been asked for evidence in this capacity.
The subpoenas stem from a complaint of corruption laid against Matjila last year at the Brooklyn Police Station in Pretoria.
The evidence requested relates to the allegations around that time to the effect that Matjila had caused the PIC to fund a company to benefit his alleged lover Pretty Louw.
Matjila flatly denied the allegation at the time and the PIC’s board publicly announced that it accepted that he had done nothing wrong.
Matjila had suggested in media interviews that factually incorrect rumours about this deal were part of an attempt by the forces of state capture to get rid of him and seize the PIC’s unrivalled financial muscle – R2 trillion invested on behalf of state civil servants and other state entities.
At the time, Louw told journalists that she received no money from the PIC and that she was not Matjila’s romantic partner.
However, the allegation that is being investigated is not that she directly received money from the PIC – based on information from an unnamed whistle-blower, the subpoenas call for the “full investigation report or internal report, including working papers, conducted by an internal audit” on two parts of the alleged hand-out.
The R21 million
First, there is an alleged loan of R21 million made to a company called Mobile Satellite Technologies, which manufactures and deploys buses that are kitted out as mobile clinics or schools.
Founder Fernando Acafrao did not respond to City Press’ request for comment.
The second part of the allegation is that a sum of R300 000 was paid to Louw by a different company, Ascendis, which is represented by businessman Lawrence Mulaudzi.
This payment was supposedly made on instruction from Matjila.
Attempts to get comment from Mulaudzi by phone and SMS were also unsuccessful.
Mulaudzi is a director of Kefolile Health Investments, a BEE consortium that received R1.8 billion from the PIC to buy shares in Ascendis Health in 2016.
Ascendis manufactures and distributes a variety of healthcare and pharmaceutical products, including the Solal and Vitaforce brands.
Following the allegations about Matjila and Louw, the PIC board in September held a special meeting, during which Matjila had to present his version of events.
Speculation was rife that he would be sacked.
However, in a subsequent media statement, the PIC said that Matjila provided “detailed documentary evidence of the decisions made by the PIC”.
It accepted Matjila’s presentations, but also mandated the PIC’s internal audit division to independently corroborate Matjila’s story.
This independent review is part of what is being demanded in the subpoena.
Gungubele is also being tasked to provide the minutes of the PIC board’s meetings in which Matjila reportedly exonerated himself.
In addition to that, SA Police Service investigating officer Sergeant Kgaile Mpholo wants the minutes from a PIC board meeting that was held on March 26.
It is not clear what decision the PIC made at this meeting, but part of the meeting was held in camera, and the subpoena calls for these recordings.
The request for copies of Matjila and More’s emails stipulates the dates May 1 2016 to April 30 2018.
State capture revisited
The chair of the PIC board at the time of the allegations against Matjila was Sifiso Buthelezi, who was deputy finance minister under Malusi Gigaba, who was controversially appointed by former president Jacob Zuma.
A few weeks after Matjila survived his grilling by the board, Gigaba doubled down on the PIC and instructed Buthelezi to conduct a massive forensic audit of all PIC investments going back to 2014.
This instruction was contained in a letter dated October 9 2017.
This mammoth task was to be outsourced and the terms of reference for the audit were supposed to be given to Gigaba by October 23.
This was interpreted by some commentators as a state capture tactic to seize control of the PIC. It is unclear what happened to the audit Gigaba ordered.
In the letter, Gigaba also tasked Buthelezi with making wide-ranging disclosures of the PIC’s business.
This included disclosing the full extent of the PIC’s unlisted investments and deals with “prominent influential persons”.
The PIC first revealed its unlisted portfolio in October, shortly after Gigaba’s letter was sent.
Internal battles
The saga around Matjila’s alleged efforts to direct money to Louw has already seemingly led to suspensions and at least one dismissal among senior PIC staff.
City Press revealed two weeks ago how the PIC had suspended company secretary Bongani Mathebula and executive head for IT Vuyokazi Menye.
Executive head of risk and compliance Paul Magula was fired last month.
All three of these executives had been subject to an investigation conducted by Matjila following the board meeting during which Matjila was cleared of wrongdoing.
The board mandated Matjila to find the source of the allegations made against him. For this purpose, he wrote to email management company Mimecast’s Cape Town office to make available the email servers of six executives, including the three suspended and dismissed ones.
The most likely purpose of this search was to find the source of the emails in which the allegation about Louw that had been sent to PIC’s board members had been made.
The PIC Responds
The PIC eventually responded, saying that even though Matjila “emphatically denies the allegations”, it will cooperate with the investigation.“The PIC contends that the charges its CEO is accused of, are eminently contestable. Dr Matjila will seek appropriate legal advice about what his rights are and he is committed to fully cooperate with any bone fide investigation by any law enforcement agency,” said the PIC’s head of corporate affairs Deon Botha.According to the PIC, Gigaba’s call for an extensive forensic audit of the corporation’s investments never came to anything.“The Board requested an engagement with the former Minister of Finance, Malusi Gigaba, to clarify pertinent aspects of his request for such a review. This meeting, however, was postponed several times by the previous minister and he was subsequently replaced before the meeting could take place,” said Botha in an emailed statement.
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