Retired Supreme Court of Appeal judge Lex Mpati. Picture: SUPPLIED.
Retired Supreme Court of Appeal judge Lex Mpati. Picture: SUPPLIED.

The commission of inquiry into allegations of impropriety at the Public Investment Corporation (PIC) began on Monday with executives providing background on how the state-owned asset manager operates.

The PIC is wholly owned by the government and is the largest investor on the continent. It manages government pension and other funds worth about R2-trillion.

Over the years, the PIC’s unlisted portfolio became an important source of funding for black entrepreneurs, but there have been allegations that deal making was influenced by political connections and wide speculation that it was used to channel funds to the ANC.

The inquiry is led by retired Supreme Court of Appeal judge Lex Mpati, who is being assisted by former Reserve Bank governor Gill Marcus and investment banker Emmanuel Lediga.

Mpati said in his opening remarks that those with knowledge of any untoward dealings involving the PIC could still approach the commission and if necessary provide evidence with their identities protected.

First to testify was Wilna Louw, the PIC’s acting company secretary. Louw provided an overview of legislation governing the PIC’s operation and the way corporate governance principles were applied, including in the composition and functioning of the board.

Louw said it was not compulsory, according to the Public Investment Corporation Act, for the deputy minister of finance to be appointed chair of the PIC, as was common practice in the past. Among other things the commission will consider is whether the composition of the board is the most effective and efficient model in running the PIC. Following a description of how board minutes were created and stored, Louw, who was not company secretary at the time, could not provide any insight in response to a question from Mpati on how the minutes for a board meeting held on September 30 2017 appeared to have been edited.

Mpati noted that seven-and-a-half of the nine pages of minutes had been struck through, indicating lines that should have been deleted from the record.

The commission’s terms of reference specify that it must probe the altering of the minutes of this specific meeting, where allegations relating to the conduct of former CEO Dan Matjila were discussed.

Roy Rajdhar, head of impact investment, provided a detailed description of the investment process for his division, which focuses on private companies.

Impact investing aims to extend capital for the specific purpose of assisting companies to expand or grow.

This differs from more conventional private equity where transactions involve just a change in ownership.

The day’s proceedings concluded with testimony from Sholto Dolamo, executive head of research and project development, who provided an overview of the type of research his division undertakes.

Louw, Rajdhar and Dolamo swore under oath that they were not aware of any impropriety at the PIC. The hearing continues on Tuesday.

thompsonw@businesslive.co.za