Jana Marais Deputy editor: Business Day
PIC CEO Dan Matjila. Picture: SUNDAY TIMES
PIC CEO Dan Matjila. Picture: SUNDAY TIMES

Finance minister Nhlanhla Nene will make an announcement on the fate of Dan Matjila, embattled CEO of the Public Investment Corporation (PIC), before the end of the week.

Nene said in a statement released on Monday that he would announce the "decisive steps" to be taken to address governance issues at the PIC, as well as allegations against Matjila, after he’s met with the PIC’s board of directors.

"I believe that the measures I will announce this week will ultimately strengthen the PIC’s governance and restore public trust in this important public institution," Nene said.

The PIC, which manages pension money on behalf of government employees and has nearly R2-trillion under management, has faced increased scrutiny over its governance and investment processes, notably the management of its investment in VBS Mutual Bank.

The PIC owns 25.26% of VBS and had two shareholder representatives on its board. VBS was placed under curatorship in March and widespread looting by executives and board members has since come to light.

Matjila has also come under fire, with Bantu Holomisa, leader of the UDM, applying to the North Gauteng High Court in July to have Matjila suspended over allegations that he acted improperly by awarding a R21m loan to a company that was linked to his purported girlfriend. He also stands accused of asking a company in which the PIC had invested to settle a R300,000 personal debt of Pretty Louw, the alleged lover. Matjila has denied the relationship.

The PIC board cleared Matjila of wrongdoing, and Nene described the allegations as "uncorroborated hearsay evidence" in court documents opposing Holomisa’s application.

The board was criticised in the UDM’s application for resolving to subject the allegations against Matjila to an independent forensic investigation in September, but then changing its mind and limiting the scope of the probe. It did so after Matjila attacked the credibility of the allegations against him, and the manner in which the allegations had reached the board, which he said was not in line with the PIC policy on whistle-blowing.

Nene said in the statement that he had gone through documents, internal audit and other reports related to the allegations, requested in May from the PIC’s board, and the board’s view on whether disciplinary action should be taken against the CEO and other PIC executives.

"My approach to the oversight of state-owned entities is that the shareholder ministry should ensure that a board of directors and management with the requisite skills and experience are appointed, and that the shareholder ministry conveys (through a shareholder compact) to the board its expectations of the public institution," Nene said in the statement.

"Once this is done, and the entity lives up to expectations, the shareholder ministry should have no business second-guessing decisions by the board, so long as these decisions are in line with the mandate of the public institution and in keeping with the compact the board of directors entered into with the shareholder ministry.

"Of course, when the board and management of the entity fail to live up to expectations, the shareholder ministry should intervene appropriately, following due process," Nene said.

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