PIC report: Matjila was an unreliable witness

Former Public Investment Corporation CEO Dan Matjila gives evidence during the Judicial Commission of Inquiry into the PIC on Monday, 8 July 2019. (Photo by Gallo Images / Phill Magakoe)
Former Public Investment Corporation CEO Dan Matjila gives evidence during the Judicial Commission of Inquiry into the PIC on Monday, 8 July 2019. (Photo by Gallo Images / Phill Magakoe)

A report into the PIC has described Dan Matjila, the former CEO of the the state-owned asset manager who was who central in investment decision making at the firm, as "unreliable witness" and evasive in parts of his testimony before the inquiry.

Matjila, commonly known as "Dr Dan" during his reign at the PIC, headed up the the continent's largest asset manager from December 2014 until his resignation in November 2018, amid growing allegations of governance failures at the firm, which manages over R2 trillion in investments.

A wide-ranging final report on the inquiry, which was led by Justice Lex Mpati, found, among other things, that Matjila, in the execution of his duties, "appeared oblivious of the ramifications regarding reputational risk for himself and the PIC" and had "a tendency to ride roughshod over the established approval and decision making processes".

The executive, who was accused by witnesses in the commission of wielding enormous power, particularly in investment decisions, was lambasted for his role in approving the controversial R4.3 billion investment into AYO Technologies prior to approval by the portfolio management committee (PMC). 

The approval contravened due process and Matjila and his then-CFO, Matshepo More, did not advise the PMC meeting that the irrevocable subscription form had been signed prior to approval.

'Not fit and proper'

The PIC has fired two officials, assistant portfolio manager Victor Seanie and Fidelis Madavo, who was executive head of listed investments, for their role in the process leading up to the approval of the transaction.

The report's findings noted that Seanie was no longer with the PIC, but recommend that with regards to Matjila, the PIC must consider reporting the contravention of the provisions of the Financial Advisory and Intermediary Services Act (FAIS) to the relevant authorities.

The Government Employees Pension Fund (GEPF) is the PIC's largest client, and the inquiry found that Matjila "did not meet the fit and proper qualities of honesty and integrity" when it came to providing accurate information to the GEPF about the AYO transcaction.

It also flagged Matjila's "consistent behaviour" of not keeping records or minutes of his interactions with potential investees in the absence of other PIC executives. It stated that such conduct "constitute[d] a breach of Matjila’s fiduciary duties".

Recover monies

The commission recommended that the PIC must consider possible personal liability in the conduct of Matjila, regarding any fruitless and wasteful expenditure for the PIC.

It has not been established how much was lost by the PIC, in total, as a result of wasteful expenditure.

"Where money has been lost or investments made where the funds provided have not been used for the intended purpose, this must be identified, quantified and recovered."

Abuse of position

Matjila's relationship with a woman called Pretty Louw was also scrutinised by the inquiry.

It had emerged that Matjila was introduced to Louw by former minister of state security David Mahlobo. Matjila was initially said to be romantically linked to the woman, but the allegation was later found to be not true.

Louw needed a cash injection for her business and Matjila arranged that a former beneficiary of PIC funding, Lawrence Mulaudzi, would assist her.   

The report found that Matjila "acted improperly in pressuring Mr Mulaudzi, as the owner of an investee company of the PIC" to assist Louw.

"This conduct constitutes an abuse of Dr Matjila’s position as CEO and is a reputational risk to the PIC," the report said.

By deadline, Fin24 was unable to reach Matjila for comment on the report's findings.

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