PIC commission of inquiry report released, finds board was 'rubber stamp' for Matjila

The Presidency has finally released the report of the judicial commission of inquiry into the Public Investment Corporation.

The commission found that there had been "substantial impropriety" at the state-owned asset manager and its board is said to have been "divided and conflicted".

The report - which runs to nearly 1 000 pages - further recommends that former acting CEO Matshepo More and former head of human resources Chris Pholwane be internally disciplined for inappropriate conduct relating to misleading the PIC board.

More and Pholwane both denied allegations against them in their testimony before the commission, which was chaired by Justice Lex Mpati.

The commission probed a range of matters at the asset manager and concluded its work last year.

The report said Pholwane should be the subject of disciplinary action for alleged improper conduct in falsifying the results of the second climate survey, thereby misleading his senior management, as well as the board.

"In respect of the potentially irregular appointment of Ms Solomon and the irregular first appointment of Mr Lackay, referred to above, Ms More and Mr Pholwane, who remain in the employment of the PIC, should be further investigated and, if appropriate, subject to disciplinary charges,"  the report said.

The report added that while the PIC had, in many instances, "sound policies, processes and frameworks", these were often not adhered to, "deliberately bypassed and/or manipulated". There is also a need to review existing policies, the report added. 

Further, it said, the board was "essentially a rubber stamp for the decisions driven by [former CEO] Dr Dan Matjila". 

"It repeatedly abdicated its responsibilities in deference to delegations of authority, even in instances where it expressed concern about a particular investment," the report said. 

It added that there was "both impropriety and ineffective governance" in a number of investments, which was "compounded by dishonesty of and material non-disclosure by Dr Matjila". 

"There are clear instances where the Commission found that directors and/ or employees benefited unduly from the positions of trust that they held," the report said. 

President Cyril Ramaphosa appointed the commission back in October 2018 to investigate allegations of irregularities in investments by the PIC, among other things.

The PIC manages over R2 trillion in state assets, and its biggest client is the Government Employee Pension Fund.

According to the commission's terms of reference, it was tasked with making findings on:

  • whether the PIC investment decisions broke any laws or internal policies;
  • any PIC director or employee unduly benefited from investment decisions;
  • internal whistle-blower protections were disregarded;
  • board minutes were correctly reflected;
  • confidential information was leaked to third parties;
  • any PIC leader victimised employees;
  • the PIC's current operating model is efficient.

Over a period of eight months public hearings were held and key witnesses such as former CEO Matjila, businessman Iqbal Survé and UDM leader Bantu Holomisa and 74 others appeared before the commission. Public hearings wrapped up in August 2019 and the commission submitted its final report to the president by the December 15, 2019 deadline. Ramaphosa had extended the commission's deadline three times as more information on questionable investments came to light.

Among the investments which came into the spotlight include a R4.3 billion investment into technology company AYO, back in 2017. The PIC has been litigating to recover the money with interest, as it has since been revealed by former AYO executives that the company's market value was misrepresented and the PIC paid far too much.

PIC officials, including Matjila also had to account for failed investments such as Steinhoff and Erin Energy, which is linked to former finance minister Nhlanhala Nene's son.

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