Mondli Gungubele questions PIC board’s handling of Dan Matjila allegations
The deputy finance minister questioned the motives of some PIC board members in the way they dealt with claims against their previous CEO
Deputy finance minister Mondli Gungubele questioned the credibility and manner in which the Public Investment Corporation (PIC) board dealt with allegations against its previous CEO, Dan Matjila, on Monday.
The deputy minister was testifying before an inquiry led by retired judge Lex Mpati, into the asset manager’s governance. The PIC has been embroiled in numerous controversies that include allegations of corruption.
“I held the view that the board had not carried out its fiduciary duties,” said Gungubele in reference to an allegation improper relation between Matjila and a woman.
The PIC manages more than R2-trillion in assets on behalf of the Government Employees Pension Fund (GEPF) and other social security funds such as the Unemployment Insurance Fund (UIF) and the Compensation Fund.
Gungubele, who was appointed chair of the board of the PIC in May 2018, described on Monday how his first priority was to review the manner in which the board had dealt with the allegations made against Matjila in September 2017.
Matjila had been accused of having an improper relationship with Pretty Louw, who was introduced to him by then intelligence minister David Mahlobo.
Louw received a loan at the request of Matjila from a businessperson named Lawrence Mulaudzi, who in turn had previously received money from the PIC.
In addition, a business Louw represented, Maison Holdings, received funding of R21m.
When Gungubele previously began reviewing the manner in which the board had dealt with these accusations, he was perplexed as to why it publicly expressed confidence in Matjila at the time.
“If you [had just been] advised to conduct a forensic investigation and before receipt of the report from internal audit, how then did you reach a determination to express confidence in the CEO and CFO? I wanted them to re-look at the issue and they said they were happy with the way it was handled and the matter was closed,” said Gungubele.
He also alluded to factions on the board that became evident any time the matter of Matjila was discussed.
“The evidence on record will show that at any point in time on the issues affecting Dr Matjila, there was division. I have openly questioned whether some board members had a relationship with Matjila outside of the board roles,” Gungubele said.
A report by advocate Geoff Budlender, who was asked by the PIC board to look into allegations, later found that while Matjila did not have a romantic relationship with Louw, he did intervene inappropriately on her behalf at the behest of Mahlobo.
The PIC inquiry is also investigating allegations of corruption against four of its directors, including Gungubele.
At the beginning of February, Gungubele and the entire PIC board of nonexecutive directors wrote to finance minister Tito Mboweni and asked to be relieved of their duties. The board, however, will remain in place until Mboweni makes the new appointments.