PIC caught in row over blunders
The board of directors of the embattled Public Investment Corporation’s (PIC) has sought legal advice about suspending its chief executive officer, Dan Matjila, and its chief financial officer, Matshepo More, before the start of an independent forensic investigation.
This was revealed by board chairperson and Deputy Finance Minister Mondli Gungubele this week.
Current and former staff members, who claim there have been irregularities and impropriety at the state-owned entity, wrote to Gungubele last week to request that the two be suspended.
The letter followed Finance Minister Nhlanhla Nene’s recent announcement that the board should conduct an independent forensic investigation into the allegations levelled against the two executives, and that a commission of inquiry should be established into the whole of the PIC.
Gungubele said the allegations had been public since last year so “the question can be asked: What difference does it make if you suspend them now? However, you cannot discount the possibility of their presence interfering with the investigation.”
The board had decided it would seek a legal opinion on what would be “a fair process for both the subjects of the investigation and the institution”, Gungubele said.
He said the board wanted the investigation to start next week.
“Now we have put two board members to seek legal opinion … but the process of actually procuring forensic investigation [for] that process is on.”
Yet United Democratic Movement leader Bantu Holomisa said the forensic investigation was a sham and would not yield any results.
“Nene is playing games but we understand because he is the one who appointed this CEO [chief executive officer] when he was a deputy finance minister.
“When you say the board must investigate but Matjila is part of the board to investigate him, how is that going to happen?” Holomisa asked.
He said that by asking for a legal opinion, the board was “running away from their fiduciary duties”.
“What the board should have told Nene is that they refuse to reopen the [investigation] because they are conflicted and had closed the case,” Holomisa said.
Nene should have appointed a commission of inquiry with terms of reference and its own forensic investigators instead of a board-run investigation, he said.
“Those terms of reference will then have empowered that commission to appoint or to conduct its own forensic auditing to get to the bottom of this. His approach is questionable,” Holomisa said.
The PIC board has been divided over how the investigation into the allegations made against Matjila has been handled.
He became the subject of an internal investigation last year following allegations that a woman alleged to be his girlfriend, Pretty Louw, had indirectly benefited from R21-million in funding from the state-owned entity.
It was further alleged that Matjila had requested a PIC-funded businessperson, Lawrence Mulaudzi, to pay a R300 000 personal debt for Louw. More was seen to have been complicit in these matters.
The majority of the board cleared Matjila of any wrongdoing after he allegedly discredited the whistle-blower and the process that was followed.
This also divided the board, with former deputy finance minister Sfiso Buthelezi and other board members objecting to a decision not to institute an independent forensic investigation of the two executives.
Treasury sources said the board could not now suspend the two executives over allegations that it had already cleared them of.
The divisions in the board have led two board members to resign. Earlier this week Tantaswa Fubu, who was the chairperson of the audit and risk committee, resigned with immediate effect. More than a week ago, non-executive director Claudia Manning also resigned.
The Public Servants’ Association (PSA) has also raised concerns about the divisions in the PIC board. The PSA represents about 240 000 members of the public service who belong to the Government Employees’ Pension Fund, which invests its money through the PIC.
“The PSA has made its view very clear in the recent past that the composition of the PIC board is a serious concern,” said Ivan Fredericks, the PSA’s general manager.
He said political interference was playing a major role in the challenges the PIC was facing. “This should be eliminated urgently and the corporation should operate independently to protect the pension investments of public servants.”