The board of the Public Investment Corporation (PIC) was divided over how to handle allegations of impropriety levelled against former CEO  Daniel Matjila.

“There were very divergent views on how to deal with the allegations,” said Claudia Manning, who testified before the Mpati commission of inquiry on Tuesday. Manning served as a nonexecutive director at the PIC from December 2015 to July 2018.

The allegations against Matjila had been raised in a series of
e-mails sent from James Nogu, a fictitious e-mail account.   Among the allegations were claims that Matjila was involved in a romantic relationship with a  woman named as Pretty Louw, who had been introduced to him by then intelligence minister David Mahlobo.

The e-mails further alleged that Matjila had inappropriately arranged for a loan to be extended to Louw, as well as a grant from the PIC’s corporate social investment programme. Matjila was also accused of asking the owner of a business that received funding from the PIC to extend a loan to Louw.

In Manning’s account of the board’s deliberations, someone proposed commissioning an external independent investigation into the matter. The way forward was “debated at length” before it was decided the company’s internal audit team would be asked to verify and authenticate the documents that had been provided by management in their representations to the board.

But the decision to appoint the PIC’s internal audit team was curious. In testimony given last week, the executive in charge of internal audit, Lufuno Nemagovhani, told the commission he had specifically requested the assistance of an external specialist.

“I indicated that the nature and complexity and level of this matter (board level), we [internal audit] will assist but we would like to outsource these matters to be dealt with by an external, qualified person,” Nemagovhani said.

Given that the anonymous e-mails included internal confidential documents of the PIC, indicating a security breach had taken place, it was surprising the board never followed up on who had sent the anonymous emails, Manning said. She said the board could have issued  a subpoena to the internet service provider the e-mails were sent from.

Manning also described how unhappy the Government Employees Pension Fund (GEPF) was with developments at the PIC. “In March 2018, the GEPF made clear its concerns that there was not alignment between what they wanted and what the PIC was doing.”

The GEPF wanted the role of chief investment officer to be “re-created”, Manning said.

Matjila had occupied the role of chief investment officer and CEO up to that point. The GEPF also wanted all deals above R2bn to be referred to them for approval.

The commission resumes tomorrow with testimony from an as yet unidentified previous employee of the PIC.

thompsonw@businesslive.co.za