The biggest bombshells in the PIC report, which is absolutely scathing of Dan Matjila


The long-awaited and newly released report into wrongdoing at the Public Investment Corporation, which manages civil servant pensions, details a litany of transgressions by its former CEO Dan Matjila.

President Cyril Ramaphosa appointed a  commission in October 2018 to investigate allegations of irregularities at the state-run asset manager. The commission, chaired by Justice Lex Mpati, concluded eight months of public hearings into the PIC in August. It released its report on Thursday.

While other former PIC employees are also fingered, the report is scathing of Matjila’s "complete disregard" for transparency, and his consistent failure to take no individual accountability for material errors, mistakes or failures.

It also found that Matjila directly solicited donations for Cosatu and the ANC from individuals whose companies the PIC had invested in. The commission found large fee payments on deals to "privileged insiders", often former employees of the PIC.

"The Commission found that there was both impropriety and ineffective governance in a number of investments. This was compounded by the dishonesty of and material non-disclosure by Dr Matjila, both during his evidence at the Commission and in decision-making processes regarding various transactions."

Under Matjila, the PIC made repeated investments with a small number of entities which presented a "repeat opportunity for enrichment of single individuals".

It also found exorbitant fees paid to advisors, without detailed invoices as to costs incurred.

This resulted in considerable losses, the commission found.

The commission wants the PIC to hold Matjila financially responsible for these losses - it must "explore whether any personal liability is attached to the conduct of Dr Matjila, including with regard to any fruitless and wasteful expenditure which, if found to be the case, would make Dr Matjila liable to make the loss to the PIC whole".

Here is some of the malfeasance that the report found:


The commission highlights Matjila’s "gross negligence" in the PIC’s R4.3 billion deal to buy a 29% stake in Iqbal Surve’s AYO Technology in 2017, at R43 a share. This was based on a valuation of AYO at R13 billion when in fact the company had total assets worth only R292 million.

Independent News and Media South Africa

The reports found that INMSA was not repaying a loan to the PIC and that Matjila showed "complete disregard of the PIC’s investment processes" in signing an agreement that allowed the PIC to swap its debt and shares in Independent for a stake in another Survé company, Sagarmatha, in December 2017.

"The proposed Sagarmatha transaction, including the suspected share price manipulation and essentially attempting to use the PIC’s own investment to pay the debt INMSA owed to the PIC, demonstrates a lack of ethics, lack of compliance with laws and regulation, and a disregard for the best interests of the PIC and its clients."


The commission found possible irregularities in Matjila’s conduct as part of R9.4 billion deal involving the purchasing of shares in Steinhoff.

There was a suspicion of "collusion" between Lancaster’s chairperson and sole shareholder, Jayendra Naidoo, and Matjila, and there was ultimately no reason for the PIC to invest in Steinhoff via Lancaster’s subsidiary, L101.

PIC director punts lover’s deal

The commission found that PIC board member Sibusisiwe Zulu promoted an investment deal with Ascendis Health, which would have benefited her lover businessman Lawrence Mulaudzi. The Commission found that R100 million which was approved by the PIC for the purchase of shares in Ascendis, was not used for that purpose.

Rather, it seemed that the R100 million had been added to the transaction fees and paid to two entities of Mulaudzi, the report found. Mulaudzi was also involved in other PIC deals. The PIC must undertake a forensic audit of the utilisation of the funds provided to Ascendis, the commission said.

A lifestyle audit by PwC also found "serious discrepancies" in Zulu’s affairs. She undertook to provide the Commission with a written explanation, which she failed to submit. This included that R100 000 was paid by Mulaudzi into her account for a couple of months in 2018. Zulu also couldn't explain where she got R6.7 million to buy a house in Umhlanga Rocks.

The commission wants a further investigation into the discrepancies in her lifestyle audit.

Two directors received millions from VBS

The commission found that two PIC executives - Ernest Nesane and Paul Magula - "egregiously violated their fiduciary duties" after they were appointed to the VBS board. They punted a revolving credit facility from the PIC to the VBS, and Nesane received R16.7 million from the bank, while Magula got R14.8 million.

"They seem to have been handsomely rewarded for turning a blind eye," the report found. "Both men used their positions of trust and responsibility to unduly enrich themselves at the expense of the depositors, clients and investors of VBS, including the PIC."

PIC invested in bankrupt Nigerian oil firm

The PIC provided a financial guarantee to group that explored oil in Nigeria, despite it being technically insolvent and against the advice of the PIC’s own energy experts and internal team.

"The question has to be asked as to how appropriate it is for an asset manager of a pension fund to invest in oil exploration, which is a high-risk endeavour," the commission said.

Money paid to minister’s friend

Following a request from the former Minister of Intelligence David Mahlobo, Matjila authorised a payment of R500 000 to Pretty Louw for work related to a CSI project. Matjila was introduced to Louw by Mahlobo.

Businessman Lawrence Mulaudzi – who was in a relationship with a PIC director and benefited from a number of PIC deals – testified that Matjila asked that he pay money to Louw.

"Dr Matjila’s repeated efforts to have Mr Mulaudzi provide financial assistance to Ms Pretty Louw reflects the abuse of his office and influence over investee companies," the commission found.


Harith was a company established to manage two PIC funds "at significantly high fees". The former Deputy Finance Minister and former chair of the PIC, Jabu Moleketi, was appointed chairman of Harith.

"Harith’s conduct was driven by financial reward to its employees and management, and not by returns to the GEPF [government employee pension fund].

"In essence, the PIC initiative, created in keeping with government vision and PIC funding was ‘privatised’ such that those PIC employees and office bearers originally appointed to establish the various Funds and companies reaped rich rewards."

The Commission recommends that the GEPF and the PIC should jointly appoint an independent investigator into Haith, and examine Moleketi’s conduct.

Millions for Edcon advice 

The PIC paid almost R33.7 million to two advisors in a deal to facilitate its investment in Edcon - Kleoss Capital and former PIC employee Koketso Mabe of Keletso M Squared.

"The terms of the above agreement significantly disadvantage the PIC, to put it mildly," the commission found, and recommended that the PIC review all contracts signed with advisors over the past five years.

It also recommended that the Edcon transaction be reviewed, to see whether the advisers really earned the money.

IT contraventions

The commission found that Simphiwe Mayisela, the former PIC senior manager of information security, obtained access to emails and other information of the PIC illegally. Mayisela got hold of privileged information and pass such information on to third parties, "with severe consequences for the PIC", the commission found.

Attempted bribe in SA Home Loans deal

The commission wants a full investigation into the role of Wellington Masekesa, executive assistant to Matjila, after allegations that he asked SAHL to ‘regularise’ ‘arranging fees’ of R95 million in a funding deal between the PIC and the company.

Forced merger

In 2015, the PIC agreed to fund an empowerment consortium that wanted to buy a 23% stake in the South African arm of the oil company Total. The reported found that Matjila "imposed" a merger on Kilimanjaro Capital and Sakhumnotho as part of the deal, and that PIC employee Tshepo Rapudi acted improperly by giving instruction that the transaction amount be increased from R1.7 billion to R1.8 billion.

The additional R100 million was allegedly funding for transaction fees. The commission wants the PIC to determine who received the money, and what it was paid for.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot