Claims of billion rand deals for friends, death threats and whistleblowers - the PIC inquiry so far


Since its first round of public hearings in January, the judicial commission of inquiry into the Public Investment Corporation has been investigating allegations of poor governance and impropriety at the state-run asset manager.

The inquiry was announced by President Cyril Ramaphosa in mid-August 2018, following allegations of poor governance, kickbacks and perplexing investment decisions at the institution which manages roughly R2.2trn worth of assets on behalf of public sector employees.

Evidence heard so far from past and present employees has painted a bleak picture of the quality of PIC's internal governance standards. It has also shone a light on claims of undue influence wielded by the asset manager's former head, Dan Matjila. 

Below are some of the key aspects that have come out of the proceedings:

Death threats

Witnesses who have testified at the inquiry have received death threats, which has forced authorities to not reveal the names of future witness prior to their appearance before the commission.

Suspension of two executives

Two senior PIC executives were suspended in the first week of the inquiry - the group's Head of Listed Investments, Fidelis Madavo and its Assistant Portfolio Manager, Victor Seanie.

The pair learnt of their suspensions on the morning of the same day that Madavo testified. They were suspended following a probe of their roles in the PIC's R4.3bn investment in AYO Technology Solutions in 2017. AYO is linked to businessman Survé. Survé has denied there was anything wrong with the deal. 

All out for AYO

The commission heard that PIC liquidated billions in assets to fund the AYO deal in late 2017. Shares in various companies totalling between R3.7bn to R3.8bn were sold to cover the transaction, which Seanie described as a “foregone decision”. Survé, who testified last week, defended the deal and praised the asset manager's former head, Dan Matjila as a "very important person in this country". 

Attempt to recoup AYO funding

In February, the Companies and Intellectual Properties Commission ordered the PIC to recoup its R4.3bn investment in AYO, arguing that the transaction was irregular. The CIPC gave the PIC just 15 days to recoup the money, while AYO argued the order was based on incorrect information

In the end both the PIC and AYO launched applications to challenge the order, but for different reasons. AYO wanted to have it set aside for good, while the PIC argued that while it did want to recoup the funds, the time-frame given by the CIPC was too tight and the original order contained inaccuracies.

The order was set aside in late March, but the PIC says it still wants to recoup the funds.

Board offers resignation

The majority of the PIC's board offered to resign in early February. A new board has not yet been appointed, and the board is continuing to operate until a new one is appointed. 

A member of the board later told the inquiry that board members only offered to step down after they were instructed to do so by Finance Minister Tito Mboweni. Board Chairperson Mondli Gungubele, who is also the deputy minister of finance, had earlier told the inquiry that the board was not instructed to resign.

Matjila and the whistleblower

The inquiry heard that Matjila, who resigned in November 2018, was actively involved in trying to uncover the identity of an anonymous whistleblower, despite the fact that Matjila was implicated in the claims. The PIC has not been able to establish the real identity of the person who went by the pseudonym “James Noko” or "James Nogu". 

A board member testified that the anonymous emails created a climate of distrust and fear. "Toxicity and suspicion" grew among board members as they "began to suspect one another", said Dudu Hlatshwayo. 

In early March the commission heard that Matjila was so determined to find the source of the emails that external security experts were brought in to probe the company’s IT system without the asset manager's own IT team being informed. 

Acting CEO suspended

Acting CEO Matshepo More was placed on precautionary suspension in late March, following allegations that she was interfering in processes related to the inquiry. Vuyani Hako, the group'd executive head of properties, replaced More in an acting capacity.

Survé hits out at competitors

Iqbal Survé, chairperson of Independent Media and head of investment holding company Sekunjalo, testified for two days before the inquiry last week. 

The commission had previously heard testimony about how three companies linked to Survé  - AYO, Independent Media and Sagarmatha - sought billions in funding from the state-run asset manager. Of the three, only Sagarmatha was unsuccessful in securing an investment. 

Survé used the opportunity to sing the praises of companies under the Sekunjalo umbrella, hit out at the white business community and rival media houses, and criticise those he views as his adversaries, including Deputy Finance Minister Mondli Gungubele.

He repeatedly denied the PIC had favoured his companies, even claiming the asset manager was treating him with "disdain" by not answering his emails. 

The Inquiry will resume on Monday in Pretoria. The commission was expected to submit its final report by April 15, but this has been extended and the inquiry's terms of reference broadened to determine whether the PIC acted in accordance with clients’ mandates. The new date for the submission of the final report is July 31.

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