PIC board member quits amid divisions
The split at board level at the Public Investment Corporation (PIC) over the handling of an investigation into embattled CEO Dan Matjila seems to be widening, with nonexecutive director Claudia Manning resigning at the weekend.
While Finance Minister Nhlanhla Nene moved on Monday to calm concerns over governance at the PIC, saying he will make an announcement on the "decisive steps" to be taken to restore trust in the institution before the end of the week, his assurances came too late to prevent Manning’s departure.
It is understood Manning, a development finance expert who joined the PIC board in 2015, was unhappy about the stance taken by PIC board chairman Mondli Gungubele, who as deputy minister of fnance automatically serves as the PIC’s chairman, on a court case related to the tenure of Matjila.
Several other board members are understood to be unhappy with the leadership of Gungubele, who has also come under fire from the Public Servants’ Association, which has demanded his removal. Manning declined to comment.
Earlier in July, Gungubele, a former mayor of Ekurhuleni who was appointed to the Treasury in February, opted not to oppose an application brought by United Democratic Movement leader Bantu Holomisa to suspend Matjila.
This stance pitted him directly against Nene and the majority of the PIC board.
In his court documents, Gungubele said he "cannot confidently state" that the PIC’s board "acted properly" when it dealt with the Matjila matter, which predates his appointment as chairman. He opted not to oppose any aspects of Holomisa’s application, despite signing a board resolution to oppose the request for a declaration that the board has a conflict of interest and therefore must be prohibited from taking decisions on Matjila’s fate.
That resolution was only opposed by board member Sibusisiwe Zulu, who said the process being followed by the board in conducting the investigation into Matjila was "flawed and stands to be challenged".
The Matjila matter relates to allegations that he acted improperly by giving a R21m loan to a company linked to his purported girlfriend.
He is also 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. In court documents opposing Holomisa’s application, Nene described the allegations as "uncorroborated hearsay evidence".
The PIC, which manages pension money on behalf of government employees and has nearly R2-trillion under its management, has faced increased scrutiny over its governance and investment processes.
On Monday, Nene said in a statement he believed the measures he will announce later this week "will ultimately strengthen the PIC’s governance and restore public trust in this important public institution". As the finance minister, Nene appoints the PIC board.
"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.
Neither Gungubele nor the PIC responded to Business Day’s requests for comment.