Tito Mboweni. Picture: ESA ALEXANDER
Tito Mboweni. Picture: ESA ALEXANDER

Finance minister Tito Mboweni threatened to dismiss the entire board of the Public Investment Corporation (PIC)  if they did not resign en masse, one of the asset manager’s directors testified on Tuesday. 

Dudu Hlatshwayo told the inquiry into the PIC what took place before the mass resignation of the board on February 1.

The inquiry into the PIC’s governance is being led by retired judge Lex Mpati. The corporation has been embroiled in numerous controversies that include allegations of corruption.

Hlatshwayo recalled deputy finance minister Mondli Gungubele, the chair of the board, taking a phone call during a meeting on February 1, and then returning to inform them of Mboweni’s ultimatum.

Hlatshwayo asked if this would not be taken as an admission of guilt by the board over various dealings, including its handling of controversies surrounding its former CEO, Dan Matjila.  

According to Hlatshwayo, Gungubele then said: “You resign today or face being fired on Monday.”  

A fellow director then penned the letter of resignation that was approved and submitted to Mboweni.

This description contrasts with the more gentle account offered by Gungubele on Monday, in which he described how Mboweni asked the board to reflect on how they had performed their duties.

Hlatshwayo had been appointed as a director of the PIC on December 1 2013.

She characterised the tenure of Gungubele, who took over as the chair from May 2018, as being “hostile” towards the board, in particular over the manner in which the board had dealt with allegations against Matjila. 

He felt the board exonerated the CEO without due process. I felt belittled. I felt ambushed and attacked,” said Hlatshwayo.

Matjila had been accused of having an improper relationship with Pretty Louw, who was introduced to him by then intelligence minister David Mahlobo.

Louw received a loan at the request of Matjila from a business person named Lawrence Mulaudzi, who in turn had previously received money from the PIC.

In addition, a business that Louw represented, Maison Holdings, received funding of R21m.

A report by advocate Geoff Budlender, who was asked by the PIC board to look into allegations, later found that while Matjila did not have a romantic relationship with Louw, he did intervene inappropriately on her behalf at the behest of Mahlobo.

More accusations were made towards the end of January against board members, including Hlatshwayo and Gungubele, from an anonymous whistle-blower going under the name James Noko.

Hlatshwayo denied all the allegations and said she believed James Noko was more than one individual and rather PIC employees, along with external people. 

Hlatshwayo believes the board did nothing wrong in their handling of the Matjila controversy, and believes that Budlender’ forensic report substantiates this.

Despite the resignations, Gungubele and the board will remain in place until Mboweni makes new appointments.

The PIC manages more than R2-trillion in assets on behalf of the Government Employees Pension Fund (GEPF) and other social security funds such as the Unemployment Insurance Fund (UIF) and the Compensation Fund.

thompsonw@businesslive.co.za