CAPE TOWN – The former chief executive of the Public Investment Corporation (PIC) Dr Dan Matjila is set to appear before the Commission of Inquiry into alleged impropriety at Africa’s largest asset manager, which signals the endgame for the commission.
According to a Bloomberg report, Matjila said he was removed from his job so that politically connected people could influence the fund’s investment decisions. He is expected to tell the commission of inquiry on Monday that he was pressured to make deals that didn’t fit with South Africa’s Public Investment Corp’s strategies, according to his prepared statement.
President Cyril Ramaphosa established the commission after leaked emails made damning claims implicating powerful members of the PIC board, such as the former Deputy Finance Minister Mondli Gungubele – who was the asset manager’s chairperson. Other implicated directors are suspended acting CEO Matshepo More and non-executive director Sibusisiwe Zulu.
Zulu is in a love relationship with Kilimanjaro Capital’s director Lawrence Mulaudzi, whose company is said to have benefited through various transactions involving the asset manager.
General says ‘take a closer look’
United Democratic Movement leader General Bantu Holomisa urged the commission led by Justice Lex Mpati to take a closer look at allegations made by a whistleblower against Mulaudzi and why it seemed so easy for Mulaudzi to gain access to PIC funding.
The UDM leader referred the commission to the alleged funding support for Kefolile Health Investments for the subscription of Ascendis Health and Bounty Brands shareholding. He said the Kefolile deal, that involved the PIC and other common role-players, had been for an aggregate amount of R1.775 billion funding support.
“The alleged common role-player, in this and the Project Atlas deal, is Mr Mulaudzi. We think you would be wise to inquire what his role had been in both deals, whether he received transactional incentives and most importantly if all the allegations are true, why it seems so easy for Mr Mulaudzi to gain access to PIC funding,” he said.
Holomisa said the commission would also be well advised to scrutinise these records and verify how many companies were linked to Mulaudzi.
Plea for R5m
Holomisa told the commission that he came across a text message, which was an apparent conversation between Mulaudzi and Zulu whom he seems to be pressurising for a payment to be done.
The text message reads: “Dear Busi I would like to ask for your intervention on the payment meant to be done by Pretoria office a fortnight back. They kept promising every day that payment would be done with no success. Please I need your assistance. We are in breach of our bridge loan and we are frustrated not knowing where to get R5 million at the moment.”
The first entry in the commission’s terms of reference states that it must enquire into, make findings, report on and make recommendations on whether any alleged impropriety regarding investment decisions by the PIC in media reports in 2017 and 2018 contravened any legislation, PIC policy or contractual obligations and resulted in any undue benefit for any PIC director, or employee or any associate or family member of any PIC director or employee at the time.
Mulaudzi confirmed at the commission that he was in a love relationship with Zulu, which prompted assistant commissioner Gill Marcus to highlight the importance of respecting people’s privacy.
“I think that’s really important because notwithstanding that allegations can be made about people’s assumptions especially when they are anonymous as they have been through the James Nogu e-mails I think it behoves us as a society to respect the privacy of people and I think that your having come here and had to set this out for me is, you know I almost want to apologise to you for having to do it,” said Marcus.
The whistleblower, who goes by the pseudonym James Nogu/Noko, alleges that Zulu is part of a triad that includes the former chairman, Gungubele, and the suspended chief executive, More.
“Since the appointment of the acting chief executive, it has become common knowledge in the transaction market that if you want any deal to be considered by the PIC you need to seek a meeting with Zulu’s boyfriend, who will then talk to both More and Gungubele to get the go-ahead. If you agree to their terms of sharing 50 percent of the transactional fees and 40 percent shares in the proposed transaction which will be distributed to Mondli, More and Zulu through selected proxies, then your deal will be approved with no hassles,” claims Nogu.
While this subject has been raised at the commission, the allegations have not been thoroughly tested considering that the terms of reference speak directly to the probe of such corrupt practice at the PIC.
Evidence leader Advocate Jannie Lubbe put it to the commission that Gungubele was implicated in the Nogu emails, to which Gungubele responded: “You know when we became aware of Nogu’s email, I convened a special board meeting in order to allow the board to deliberate on the way forward. So, that this matter (does) not linger. This was also after one of the directors implicated in that email had sent the board a request that allegations against her be independently investigated.”
More never got to tell her side on this allegation. Instead, she was asked who James Nogu was. “You know, like have you found out? You are on the board and you are a senior person there. What is your speculation? What is your thinking? Or who are the James Nogus, because there could be more than one,” asked assistant commissioner Emmanuel Lediga.
More responded: “I had hoped the commission would come out with that answer. My speculation is maybe it is two different people I have tried not to speculate on who it is because it will create a culture of distrust I don’t know who James Nogu is.”
Wild goose chase
The PIC board originally reacted to the whistleblower’s allegations by sending the former chief executive on a wild goose chase in pursuit of the apparent IT security breach at the asset manager.
“Then the board left it in the hands of the CEO to investigate how this could have happened. This step emerges, incidentally, upon the allegations of the CEO. The CEO then moves to actually deal with what he believes was a leakage in the system. Now if I follow the chronology of the events, the first thing they wanted was to find the source of the emails,” he said.
The PIC’s former head of risk and compliance, Paul Magula, said the board was complicit in this regard.
The commission has repeatedly requested witnesses who have appeared before it to avail themselves should it require them to. This is pertinent because while the commission has extensively probed transactions into fully operational companies such as Lebashe and AYO, it certainly has not dug deep enough with regard to the Mulaudzi-linked entities through which the PIC bigwigs are alleged to have lucratively benefited.
Claims of improper conduct by the former chief executive may be considered serious but nothing has come to the fore that he personally benefited from the asset manager’s dealings. The claims against Gungubele, More and Zulu suggest that they did personally benefit through Mulaudzi.
Matjila, who has been acknowledged as having been key in putting the PIC among the top asset managers globally, over the last decade, is expected to respond to accusations on deals involving Erin Energy; Tosaco Energy; S&S Refinery, Steinhoff International, VBS Mutual Bank and Ayo Technology Solutions.
Zulu, who is said to be the most powerful among the Mulaudzi-linked triad, has not appeared before the Mpati Commission and it remains to be seen if she ever will as. Zulu’s evidence could be the commission’s last chance to test the allegations made by the whistleblower as the commission may now be in its endgame.
This story first appeared in the Business Report Online