Tantaswa Fubu. Picture: FREDDY MAVUNDA
Tantaswa Fubu. Picture: FREDDY MAVUNDA

Another nonexecutive director at the Public Investment Corporation (PIC) has resigned with immediate effect, leaving behind a divided board squabbling over whether to suspend its executive directors pending a forensic investigation into the conduct of Africa’s largest fund manager.

Tantaswa Fubu’s resignation on Monday followed that of Claudia Manning, who resigned on July 24. Fubu was chairwoman of the audit and risk committee.

Finance Minister Nhlanhla Nene had received Fubu’s resignation, said spokesman Jabulani Sikhakhane on Tuesday. He said the ministry had already initiated the process of appointing directors to replace Fubu and Manning.

The board is divided on how to handle the finance minister’s directive for it to institute an investigation into the affairs of the PIC, which manages about R2-trillion in the pension assets of government employees. The PIC has since September been dogged by allegations of impropriety against CEO Dan Matjila, who is alleged to have dished out R21m in PIC funds to a company linked to an alleged lover of his. Matjila denies he is romantically linked to Pretty Louw.

The PIC also recently came under the spotlight for its handling of investment decisions involving VBS Mutual Bank, which was placed in curatorship earlier this year. Two PIC representatives on the 25%-owned VBS board are alleged to have irregularly benefited from the looting of the bank by its executives.

Ernest Nesane, the executive legal head of the PIC, resigned with immediate effect in early July after forensic investigator Terry Motau notified the PIC of "serious allegations of impropriety" against him. Back in April, the PIC had fired Paul Magula for poor performance. He was the executive head for risk management.

In a strongly worded letter to Nene, Fubu said part of her reasons for quitting was that the PIC "has been led by a divided board for some time now. That on its own is not a concern as long as members differ on matters of principle while exercising their duties with integrity and duty of care towards the institution." In the letter, seen by Business Day, Fubu said she was not convinced that was the case at the PIC.

"I truly believe that there is a serious trust deficit amongst the board members and this plays itself out in e-mails the members write and respond to each other," says Fubu. She says she is concerned about how the board is handling Nene’s instruction to restore "good order and reputation at the PIC".

Fubu says the board ignored her request to pursue Nesane and Magula with delinquency charges in light of the allegations against them at VBS Mutual Bank. The Financial Mail obtained information from the Companies and Intellectual Property Commission (CIPC) showing entities linked to Nesane having benefited from more than R16m in loans and fictitious deposits from VBS. The CIPC data also shows Magula received a R4.8m mortgage loan from VBS.

The PIC has also been controversially linked to Iqbal Surve, chairman of the Sekunjalo, Independent Media and Ayo Technologies, who received billions of rand in investments from the PIC in what experts say were irrational transactions that have sunk the assets of the manager.

A few years ago, the PIC also invested R4bn in the politically connected Erin Energy, whose controlling shareholder Kase Lawal was alleged to have donated millions to Jacob Zuma’s education trust.

Correction: July 31 2018

An earlier version of this article misstated the name of Matjila's alleged lover.