Nene opposes UDM bid to force him to sack PIC CEO

Finance minister Nhlanhla Nene is reportedly opposing the United Democratic Movement’s (UDM) demand to immediately suspend the head of the Public Investment Corporation (PIC) because his department is already investigating the state-owned institution.

On June 15, the UDM asked the Pretoria high court to direct Nene to suspend PIC chief executive Dan Matjila and to empower the minister to take decisions on removing or disciplining the entity’s head over from the PIC’s board.

The UDM’s request followed accusations that arose in September 2017 that Matjila used PIC funds to support the business of a woman with whom he was romantically involved. Matjila denied these claims.

“The CEO provided detailed documentary evidence of the decisions made by the PIC and that the process followed was in accordance with all policies, procedures and delegation of authority of the PIC,” the PIC’s board said in a statement at the time.

The finance ministry — then headed by Malusi Gigaba — denied rumours there were plans afoot to oust Matjila at the time, though in October Gigaba asked the PIC board and Matjila to conduct a forensic investigation into concerns of irregularities at the state-owned asset manager.


The PIC is a state-owned enterprise that is responsible for nearly R2-trillion in assets, with more than 98% belonging to government or its employees. The assets include the Government Employees Pension Fund, the Unemployment Insurance Fund and the Compensation Fund.The PIC has been dogged by allegations of looting and impropriety and has recently come under fire for its controversial investment in VBS Mutual Bank.

READ MORE: Further PIC bloodletting in wake of VBS looting

The “invitation to the court to usurp the minister’s powers” isn’t congruent with the constitution because “the facts do not call for such a drastic remedy and doing so would be a breach of the principle of separation of powers,” Nene said in an affidavit dated July 2.

He has engaged “multiple stakeholders” on the governance issues at the PIC, including the allegations against Matjila, Nene said.

The UDM had given Nene a two-day ultimatum on May 29 to suspend Matjila, pending an investigation, or face legal action.

As Fin24 reported at the time, the previous week Nene had written to PIC chair and the deputy minister of finance, Mondli Gungubele, requesting information relating to the 2017 allegations 2017. At the time, the PIC’s internal audit division and the board concluded that the allegations were baseless and Matjila was cleared of wrongdoing.

UDM leader Bantu Holomisa also wrote an open letter calling on Ramaphosa to tackle the “iceberg of corruption” at the PIC, where he claims that several individuals and companies have been involved in the looting of the institution.

“Mr president, these companies and individuals all have link/s — past and present, directly or indirectly — with the PIC. It makes for uncomfortable reading when one considers the possibility of a very complicated and opaque scheme that will put at risk the Government Employees Pension Fund,” Holomisa wrote.

The UDM urged Ramaphosa to extend the terms of reference for the state of capture inquiry to include the PIC’s “entire saga of alleged deals” under the leadership of Matjila.

The UDM is facing a lawsuit after it implicated Lebashe Investment Group, and its directors Warren Wheatley, former PIC staffer Tshepo Mahloele, and former deputy finance minister Jabu Moleketi as players in the PIC’s corruption.

In June, Holomisa approached the high court in Pretoria asking it to suspend Matjila following a string of allegations levelled against the PIC boss.

On Monday, the court issued a gag order against Holomisa, preventing him from continuing to allege that Lebashe Investment Group, and prominent business figures may be involved in corruption at the PIC.

READ MORE: Court gags Holomisa over PIC corruption claims

The UDM leader was ordered to desist from making “unfounded remarks” about Lebashe Investment, Harith General Partners, Harith Fund Manager and three other individuals, including former deputy finance minister Jabu Moleketi.

Moleketi served on the board of the PIC during his tenure as deputy minister between 2004 and 2008.

Speaking to Fin24 after the ruling on Monday, Holomisa said he would consider appealing and will now continue with the matter in Parliament.

“I am still going to speak out against the apparent acts of corruption at the PIC,” he said.

On Monday a statement released by the PIC said that even though the entity was not party to the legal proceedings, it welcomed the high court ruling.

“This institution and its CEO have been the subjects of a prolonged, unjustified and malicious public campaign by the UDM and its leader for what can only be described as inexplicable, yet sinister motives to intentionally cause public confusion and tarnish the PIC’s reputation,” the statement said. 

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Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.
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