Deputy finance minister Mondli Gungubele says he is available to return as a member of the Public Investment Corporation (PIC) board and he does not believe that having a politician on the board exposes the institution to political interference.
Gungubele was the first witness to appear before the PIC commission on Monday following the commission’s two week hiatus. The commission is led by Justice Lex Mpati, with assistance from former Reserve Bank governor Gill Marcus and investment expert Emmanuel Lediga.
Gungubele was of the opinion that if the systems of the PIC are strong and independent of the state, there can be a psychological benefit for officials at the PIC if they have a credible politician chairing the board. “They can take decisions knowing that a politician will deal with other politicians who are trying to dictate to the institution,” he said.
Gungubele stressed that proper appointments and systems were primary for strong institutions because “even if the chair of this committee was not a politician the 100% shareholder is political so there is no way that you would actually divorce this institution from an ultimate political influence”.
Questions surrounding the role of the deputy finance minister chairing the PIC board received renewed attention after the mass resignation of the board in February, with organised labour and other commentators saying the interim board should be void of political figures.
After giving testimony, Gungubele told journalists that when the board handed in its resignation it indicated that it would available if required.
“We are giving the institution an opportunity when they consider everybody, to take an independent decision whether any one of us still qualifies to be the member of the board. Remember we also said by tendering that resignation we are not accepting guilt,” Gungubele explained.
The resignation of the board was triggered by allegations of corruption in an email sent by anonymous whistleblower “James Noko”, also known as “Nogu”.
Gungubele described the allegations against him as “unfounded and in fact laughable”. He has invited members of the public with evidence against him to bring it to the commission for it to be investigated, he has also agreed to give his laptop to the commission for mirroring as well as to undergo a lifestyle audit.
In the email, Nogu accused board member Sibusisiwe Zulu of indirectly benefiting from BEE transactions of her alleged lover who does business with the PIC. Gungubele was said to be protecting Zulu and trying to get the minister of finance to appoint Zulu as the chief executive.
Gungubele told the Mpati commission that he “strongly” believes that Nogu is someone within the institution and understands the dynamics within the PIC.
“Whoever is actually Nogu understands closely what is happening within the PIC. Every time the board is divided 99% of the time is when we deal with issues of [former chief executive Dan Matjila] … when you look at the content of those emails it is somebody who has a close understanding of that.”
“I doubt that it could be somebody who is confidently speculating from outside,” said Gungubele.
Nogu previously sent another batch of emails which accused Matjila of using his position to corruptly channel R21-million of PIC funding to a company owned by his alleged lover and to influence a company that previously did business with the PIC to release R300 000 to cover her personal debts. Matjila was cleared of the allegations by the board in September 2017.
Gungubele confirmed in his testimony that the R21-million loan was currently not being serviced.
He also dealt with the issue the controversial Ayo Technology Solutions transaction where the PIC invested R4.3-billion into the company “completely and blatantly flouting the PIC’s governance and approval processes”.
The PIC paid R43 per share for a 29% stake in Ayo technologies, an IT company linked to media owner Dr Iqbal Survé, despite the fact that there had been concerns raised internally that the company had been overpriced.
Gungubele told the commission he was unaware and was not told by the executive that there had been irregularities in the PIC’s transaction with Ayo. He was only made aware of the irregularities after the issue was raised in evidence to the special committee meeting before the finance committee in parliament.
Gungubele said the questions raised by members of the committee and the subsequent answers given by the head of listed Investments, Fidelis Madavo, “concerned” him. This is why he had requested that an investigation is done into the issue.
An interim report of this investigation given to the board in January, resulted in it deciding to suspend Madavo and assistant portfolio manager Victor Seanie.
“I am of the view that Ayo is going to be an unforgettable example to PIC employees that if you flout prescribed processes there will be repercussions,” said Gungubele.
“It is an opportunity to introduce a culture at the PIC which says it does not matter even if it is someone senior to you, you must refuse when told to take action that you know is against the law, PIC policy and procedures,” he added.