Former PIC chief executive Dan Matjila. (Delwyn Verasamy/M&G)
The Public Investment Corporation (PIC) did not fund the business of Siyabonga Nene, the son of former finance minister Nhlanhla Nene, according to the state asset manager’s former chief executive, Dan Matjila.
Siyabonga Nene and his business partner Ameer Mizra approached the PIC in 2014 requesting $29.25-million for a 50% black employment equity (BEE) stake in a Mozambican palm oil refinery, S&S Refinery.
Matjila says that he knew of Nene’s son as they were first introduced when the former finance minister was the chairman of the PIC. Matjila says that Nene requested that he coach Siyabonga on business and investments — a request that Matjila agreed to saying that the practice “was very common in the private sector”.
“For me I saw it as knowledge sharing and coaching. This is something I am passionate about,” Matjila said.
On Tuesday, he told the commission probing, among others, governance failures at the PIC that the PIC merely paid facilitation fees to Siyabonga Nene and Mizra for the deal as this was “common and standard practice to do in the investment industry”.
The former CEO said that the PIC did not fund the deal because the company does not fund BEE transactions outside of South Africa, adding that Siyabonga and Mizra’s shareholding in the oil refinery was to be vendor financed by the sponsor of the transaction and not by the PIC.
The refinery was owned by a Mozambican businessperson, Rassul Mohamed.
The PIC eventually invested $63-million in debt and equity between 2014 and 2016 into the deal. The debt is currently not being serviced. Matjila washed his hands of the losses that the PIC made in the deal, blaming poor governance and the collapse of the Mozambican metical against the US dollar, for the losses.
Matjila testified that the PIC had paid facilitation fees to Mizra’s newly formed company, Zaid International Trade, which had registered a bank account in the United Arab Emirates.
When asked by evidence leader advocate Jannie Lubbe whether or not it was necessary for a new company to be formed before the PIC paid the facilitation fees, Matjila responded, “I don’t know.”
“Could it be perhaps because of the relationship between (Nene) Junior and (Nene) Senior?” asked Lubbe.
“I don’t know,” Matjila responded.
Matjila however denied that the former finance minister’s Nene position as chairperson of the PIC at the time of the deal had any influence on the decision made by the PIC to invest in S&S.
“Mr Nene was neither a member of the Investment Committee nor any of its subcommittees. He would not have been able to influence a committee decision,”he says.