/ 28 September 2018

PIC’s Matjila wants a payout

The PIC’s Dan Matjila is negotiating a smooth exit from the state-owned entity
The PIC’s Dan Matjila is negotiating a smooth exit from the state-owned entity, where he was involved in controversial loss-making investment decisions. (David Harrison)

Under-fire Public Investment Corporation (PIC) chief Dan Matjila is ready to step down and has told senior ANC and government leaders he is intending to ask his board to consider a golden handshake.

Numerous sources say the chief executive has broached the subject with high-level leaders in the ANC and government, but has been urged by some in the party to see out two investigations.

There’s a fear in the ANC that, if Matjila is forced out, he could spill the beans about how senior ANC politicians benefited financially from the PIC, according to party insiders.

A forensic investigation is underway and a pending commission of inquiry announced by President Cyril Ramaphosa could potentially expose damning information about the participation of ANC leaders in PIC transactions that could have a devastating effect on the party.

The PIC is a state-owned enterprise (SOE) responsible for nearly R2-trillion in assets, with more than 98% belonging to government or its employees.

It is understood the ANC is also scrambling to contain grumbling from under-fire executives at the country’s largest SOEs who have threatened to reveal what they know about PIC deals involving senior politicians. These executives are themselves at the centre of investigations into state capture.

At this stage it is not clear what Matjila’s payout could be. But it is understood that Ramaphosa has said the government was not prepared to entertain “ridiculous demands” from the embattled PIC head.

Matjila would not comment on Thursday about the claims that he had confided in ANC and government leaders that he would like to vacate his position with an “amicable settlement”. But he said: “I still remain an employee of the Public Investment Corporation
and have a contract with the company, which runs until the end of 2019. Also note that an employment contract is a confidential matter between an employer and an employee.”

However, at least two sources with direct knowledge of Matjila’s negotiations say his request for the “amicable settlement” reached Ramaphosa’s office a few months ago. Sources have claimed that Ramaphosa is keen for Matjila to leave because he wants the PIC to be led by an individual without a dark cloud hanging over him.

“Cyril doesn’t want to work with dubious people. If there is one thing that irritates him it is corruption,” said one senior government leader.

A faction aligned to ANC secretary general Ace Magashule is worried Ramaphosa might want to appoint someone who will not be sympathetic to the ANC’s call for economic transformation.

“They want to put a white person at the top to run the affairs of the PIC,” said an ANC leader privy to the discussions.

Matjila’s performance at the PIC has been under scrutiny since late last year amid several controversies involving investments that have threatened billions of rands in losses through bad investments.

In some cases, including the funding of companies belonging to controversial media owner Iqbal Survé, questions have been raised about the processes followed.

The PIC’s board is investigating how it paid R4.3-billion for a 29% stake in Survé’s Ayo Technology Solutions even though its assets were estimated at R292-million.

Finance Minister Nhlanhla Nene revealed in July that the PIC would withdraw its 25% stake in Independent News and Media, which has benefited from more than a billion rand in PIC funding.

As of June, the PIC had recorded losses of about R19-billion from declines in Steinhoff’s listed shares and bonds, as well as the company’s empowerment transaction, which the PIC helped to fund.

In July, another company, Erin Energy, owned by Kase Lawal, a former president Jacob Zuma benefactor, filed for bankruptcy, which threatened a R4-billion PIC investment that has been reported as “dodgy”.

The forensic investigation into the PIC, announced by Nene in July, is focusing on allegations that Pretty Louw, alleged to be Matjila’s girlfriend, 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.

An initial probe by the PIC’s board cleared Matjila of any wrongdoing after he allegedly discredited the whistleblower and the process that was followed.

Nene has been under considerable pressure from opposition politicians, including United Democratic Movement leader Bantu Holomisa, Democratic Alliance MP David Maynier, and also from the ANC because of his lack of action in the debacle.

Holomisa’s stance was that Nene could not allow the PIC board, of which Matjila was a part of, to investigate allegations against the chief executive while he was there. He also called for the PIC to be part of the commission of inquiry into state capture being chaired by Judge Raymond Zondo.

The Mail &Guardian understands that Magashule’s eagerness to appear before the Zondo commission is partly because he wants to raise the alleged capture of the PIC and leaders behind it.

In July, after meeting Ramaphosa, who had also been petitioned to intervene, Nene instructed the PIC’s board to institute a forensic investigation into the allegations.

In August, Ramaphosa’s office announced an independent inquiry into the affairs of the PIC.

Holomisa again criticised the instruction, saying Nene was giving the responsibility of the investigation to the very same people who may be tainted. At the time he said Nene “cannot rely on the very same board and the chief executive officer, Dr Dan Matjila, to be player and referee. This smacks of favouritism and protection of a person that might be on the wrong side of the law once the commission gets to work.”

An ANC NEC member with intimate knowledge of the issues at the PIC said the finance minister’s instruction to the board came only after Ramaphosa’s intervention.

The president was one of the insiders who were concerned about Nene’s public posture as well as apparent inaction on the PIC’s troubles.