AS IT HAPPENED: Ex-PIC head Dan Matjila says his removal was politically motivated

PIC CEO Dan Matjila. (Photo: Gallo Images)
PIC CEO Dan Matjila. (Photo: Gallo Images)
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10 Jul 2019

Advocate Jannie Lubbe says Matjila's evidence will not be concluded by tomorrow.

He will have to make arrangements for Matjila to appear again.

The inquiry adjourns until Thursday at 09:30. 

10 Jul 2019

Matjila says he is funding his participation in the commission out of his own pocket. 

10 Jul 2019

The deal was needed to prevent a massive fight between Cosatu, the UIF, PIC, government and the ANC, with repercussions for the alliance. 

10 Jul 2019

Matjila suggests he was supposed to be removed from the PIC so the Edon deal could be finalised ahead of the elections.

10 Jul 2019

Since Matjila's departure from the PIC, there have been legal letters passed back and forth and no progress.

"It looks like everything hinges on this commission which I don't understand," Matjila says.

10 Jul 2019

Lediga asks if short term or long term bonuses were paid yet.

Matjila says short-term bonuses for 2018 were not paid- as they were to be reviewed in February 2019.

10 Jul 2019

Matjila said he did not resign but provided an exit strategy, and an amicable exit should be negotiated in terms of his employment contract. The chairman said his employment contract was terminated.

"I told the board I do not accept their decision and the separation is not amicable as stipulated in my employment contract.

"I told the board I have never expected to part ways with the company I have served for 15 years in the manner the board has chosen. That was the last time I set foot at the PIC."

Matjila adds that monies due to him have still not been paid, despite Gungubele's testimony before the commission stating otherwise.

10 Jul 2019

On November 23, 2018, Matjila was called to the board meeting.

The chairman informed Matjila the board had accepted his resignation.

10 Jul 2019

Marcus confused - if the Edcon deal was not concluded, why was Matjila asked to leave?

Matjila will explain why it was a contributing factor to his dismissal later.

10 Jul 2019

Marcus compares Afrisam and Edcon - why PIC chose to intervene with Afrisam and not Edcon, which had more jobs on the line.

Matjila explains that at the time of the Afrisam investment there was a view things would change for the better- there would be more returns by injecting money.

but with Edcon- there were no returns that could be realised. All scenarios pointed to a downside. There was a social return but not a monetary return. 

10 Jul 2019

Matjila says jobs are important but it is important to consider delivery of returns.

"We could see the social impact was huge. But we did not move quickly because the returns were not in line with the mandate required," he explains.

10 Jul 2019

Marcus says that the intervention at Edcon appeared to be a government initiative.

Matjila said he did not view it that way.

10 Jul 2019

On November 23, 2018, he attended a meeting arranged by the chairman to save Edcon from collapse.

The Economic Development Minister Ebrahim Patel was attending, as was CEO of the IDC, Edcon CEO and senior management, Edcon advisors Rothschild and Co.

Matjila explained that the PIC was approached by Edcon itself before. Bu PIC did not support the proposals as there was still a lot of downside. Edcon failed to recover. 

10 Jul 2019

In November 2018, Matjila met Gungubele at his official residence in Pretoria.

"We had some tea and chatted about the PIC. He told me he was finding it difficult to explain to his comrades why I am still CEO of the PIC," Matjila said of his conversation with Gungubele.

Matjila said he was shocked and confirmed efforts to remove him from the corporation was politically motivated.

At the time Gungubele was using crutches, following an operation.

But Matjila's plans to leave the PIC, revealed in a letter he gave Gungubele might have excited the deputy minister who cast aside his crutches and walked Matjila to his car without any impediments.

Matjila says his letter was not distributed to directors.

10 Jul 2019

Matjila met with Gungubele on August 31, 2018 at his office in Cape Town.

He explained he intended to leave the PIC in due course but once the Budlender report is released.

Gungubele was surprised - and said he expected Matjila to ask to stop the probe in exchange for his resignation.

Matjila responded he did nothing wrong and was confident Budlender would clear his name.

10 Jul 2019

Matjila says the chairman, Gungubele used the divided state of the board to drive Matjila's suspension and removal from the board.

Gungubele instructed an internal auditor to investigate the regulatory of the Ayo transaction, which was regularised.

Gungubele's reaction to the decision of the board that Matjila is not guilty based on allegations of Pretty Louw and the MST transactions which resulted in the Budlender report.

10 Jul 2019

This move prejudiced Matjila, negatively impacted him in a personal capacity, distressing his wife and children.

10 Jul 2019

Matjila said he felt that the board did not treat him fairly in making the findings public within 30 days of the conclusion of the Budlender report.

Matjila said this was part of damaging his image by not telling the public the truth about a matter that had been hanging for a long time.

10 Jul 2019

Matjila speaks of the investigation of Advocate Geoff Budlender, he says he cooperated with the probe because he wanted to clear his name.

Budlender found no romantic relationship between Matjila and Louw and that the transaction of a loan of R21m to MST and that of a R5m corporate social investment in MST had no irregularities.

These findings were only made public in the PIC inquiry.

10 Jul 2019

Matjila says people working under Paul Magula did a great job. "He was supported by a fairly strong team," Matjila says.

10 Jul 2019

Lediga asks if the CEO of the PIC should participate in investment decision making.

Matjila replies: "It depends. The PIC is a big investor."

Compared to other asset managers, it appears CIOs run investment portfolios. The PIC might want that model - I am happy with it if it makes the PIC a stringer organisation, especially if it helps with perceptions on their ability to deliver on their mandate.

10 Jul 2019

Matjila says that given the structure of the PIC and its ability to deliver on its mandate without getting on the wrong side of the law- having three distinct businesses, under one roof, managing R2trn - we are bound to make mistakes.

Having four executives of investments was the beginning of starting to have one PIC holding company with four subsidiaries, with sub-boards fitting in the main board. 

10 Jul 2019

Matjila says no formal invitation was extended to Holomisa, but exco discussed the possibility of inviting Holomisa and even parliament's Scopa to the offices to get a better understanding of the business.

He says he raised this to the board a few days before he was sacked.

10 Jul 2019

Lediga asks if Matjila and Holomisa had any negative history.

Matjila repeats that he has no idea.

"I have never met Mr Holomisa. I have seen him on TV. I have seen him at a distance. We haven't greeted each other. I have no relationship with him."

Matjila says Holomisa's interests in the PIC affairs are intriguing. He finds it concerning that Holomisa attacked the PIC without evidence.

Matjila says Holomisa was invited to come to the PIC to understand how the organisation works. 

10 Jul 2019

Lediga says there appeared to been issues with the board and the chairman from day one. He says there must have been something to warrant these disagreements.

Matjila said he had never met Gungubele before he became PIC board chairperson. He treated him as he would have any board chairperson. "I had nothing against him, I don't know what he had against me. I have no idea."

10 Jul 2019

A board meeting was held, and it was decided to oppose Holomisa's application except for the chairperson.

"This showed his lack of confidence in the board and further strengthened an impression he was negatively disposed to me," Matjila says.

Ultimately Holomisa's application was struck from the roll and not pursued further.

10 Jul 2019

The board provided written responses to the minister. While preparing their responses, the chairman called a board meeting on May 18, 2018 and Matjila was recused from it.

In feedback, Matjila heard the meeting was tense and the chairperson took a view on the matter- indicating the board erred in exonerating him.

Gungubele decided not to oppose a court application by Bantu Holomisa to have Matjila suspended. The application was launched on June 15, 2018.

10 Jul 2019

Nene wrote to Gungubele about negative media reports concerning the PIC - relating to the Pretty Louw and MST matter.

Nene wanted to deal with issues raised by his predecessor Gigaba by meeting with the PIC board and steps or disciplinary action taken against the CEO. 

10 Jul 2019

Lediga asks if it is appropriate for an advisor to attend PIC meetings.

Matjila says he does not think it is appropriate but it has been a normal occurrence. He said he would prefer someone from National Treasury to rather sit in meetings.

10 Jul 2019

Matjila said he met with the personal advisor of Gungubele to help improve communication challenges.

The personal advisor attends PIC board meetings and acts as a liaison between the deputy minister and the PIC, the advisor is not employed by Treasury.

10 Jul 2019

The level of administration was apalling when it came to PIC affairs.

10 Jul 2019

Matjila says communication between the PIC and Gungubele's office was not great. 

The PIC submissions for bonus payments were not attended to timeously.

This resulted in resentment by employees concerned.

10 Jul 2019

It took Gungubele 6 months after he took office before an induction meeting was facilitated.

Matjila met Gungubele on June 5 at his office in Parliament. The deputy minister brushed off media reports. The meeting was about the role of the PIC in boosting the economy.

10 Jul 2019

Matjila says this shows that governance at the PIC was failing. The deputy minister did not have an understanding of the PIC or his own role.

10 Jul 2019

Matjila wanted to discuss the media attacks on the PIC with the deputy minister, among other things.

Matjila said that Gungubele ignored requests to undergo induction to understand PIC.

Matjila assumed Gungubele was being briefed about other parties of the PIC. Evidence by Bongi Mathebula before the commission supports the suspicion.

10 Jul 2019

The inquiry resumes, Matjila starts the timeline following Gigaba and Buthelezi's removal from Treasury. (between February 2018 and November 2018).

The ministers were replaced by former finance minister Nhlanhla Nene and deputy minister Mondli Gungubele.

Guungubele became chairman of the PIC at the time the media attention on the PIC was at its highest.

A meeting to discuss PIC strategies was scheduled for May 14.

But was later rescheduled for June 4, at Treasury's offices.

10 Jul 2019

The inquiry breaks for lunch, and will resume a 14:00.

10 Jul 2019

Matjila said the NEF could not be funded because of the quality of the portfolio.

The NEF was making losses - this could eat into any new investment the PIC makes unless there was a change in the structure.

The PIC suggested creating a separate SPV to co-invest or manage together.

"We recognise the importance of the NEF and most importantly the importance of other development financing institutions," he says.

The PIC was looking to partner with the NEF, using their platform to create a new entity to manage together as the NEF has the needed structure. But a mechanism could not be agreed upon.

10 Jul 2019

Following the meeting with Buthelezi a new risk report was provided by Paul Magula, which was watered down.

Matjila says that this was done to allow the approval of the transaction.

Matjila confronted Magula about this - it was a difficult situation and led to Magula's suspension. 

10 Jul 2019

The NEF had requested R1bn from the PIC in 2016. But the NEF did not meet PIC requirements and the request was rejected.

After Buthelezi was appointed chairperson the NEF request was resuscitated and the amount was increased to R3bn - the PIC made a fresh consideration of the NEF. But the NEF still failed the test. The next time Matjila heard of it was at his meeting with Buthelezi at OR Tambo airport.  

10 Jul 2019

Matjila says Myeni was accompanied by other officials from SAA, possibly an acting CEO.

10 Jul 2019

However, Matjila said no minutes of the meeting were taken.

He said the process was explained to Myeni and a formal proposal was needed for the process to start.

Marcus asks if not recording minutes was appropriate?

To this Matjila says the practice in the PIC might not be "great" in that introductory meeting minutes are not recorded.

Matjila said that guidance from the commission will be incorporated to improve PIC practices.

10 Jul 2019

The SAA chairperson Dudu Myeni had requested R6bn from PIC.

This is strange for a chairperson to do so- normally a CEO or CFO would do so.

Matjila said that Myeni's links to former President Jacob Zuma was known.

Matjila said he informed Myeni that the PIC would first have to conduct an investment investigation and processes - which she seemed unhappy with.

The PIC could not fund, due to the low investment-grade rating of SAA.

Matjila had met Myeni in a formal meeting at the PIC.

10 Jul 2019

These changes affect investment strategies.

For an asset manager, stability required.

When Gordhan changed the Memorandum of Incorporation to lengthen the term of the board of directors it was a good decision.

"It would give directors more time to direct the strategy of the PIC and see it come to fruition rather than chop and change."

It ensures the management team is solid, there for longer to ensure the mandate is delivered.

10 Jul 2019

Matjila says that it is appropriate to give reasons why a board is changed. But he says in instances where boards are changed, no reasons were given why.

"I can only wish in future reasons will be given when such a major change is effected," says Matjila.

10 Jul 2019

Matjila says he believes there is a clean-up of any CEO who was appointed in the previous regime.

10 Jul 2019

Matjila says when former Deputy Finance Minister Mondli Gungubele became PIC board chair, he ran into problems.

10 Jul 2019

The situation is that here is political influence at the board of the PIC and chairman.

These are political appointees serving at the behest of the minister and not in the interests of the corporation. All past transactions are blamed on the past CEO. But this is most tenable because of the structures at the PIC.

The change in the ruling party in December 2017 – there are those with the notion that the new broom sweeps clean.

"I have never had any partisan affiliations to any political party, nor any leanings to any factions of a political party."

10 Jul 2019

Matjila says every time there is a "new sherriff in town" there are efforts to remove him.

10 Jul 2019

Matjila explains the Lancaster report would be used against him - such that the risk of the transaction was high but the PIC continued with it anyway.

Matjila said there were hedges to mitigate the risk- which is why the PIC went ahead with the deal. The risk was manageable.

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