Dan Matjila, the former head of the Public Investment Corporation (PIC), appears at an inquiry into alleged wrongdoing and poor investment decisions during his tenure on July 10 2019. REUTERS/ SIPHIWE SIBEKO
Dan Matjila, the former head of the Public Investment Corporation (PIC), appears at an inquiry into alleged wrongdoing and poor investment decisions during his tenure on July 10 2019. REUTERS/ SIPHIWE SIBEKO

Daniel Matjila, the former CEO of SA’s state-owned pension manager, denied he took a bribe to help bail out VBS Mutual Bank before the lender’s collapse, a commission of inquiry heard.

Matjila, who is testifying before the ongoing probe into allegations of wrongdoing at the Public Investment Corporation (PIC), was accused of taking R5m in cash for facilitating further funding for the lender.

“Being linked in a personal manner to the debacle that is VBS has to be the lowest of the low in allegations about my leadership of the PIC,” Matjila told the commission on Wednesday.

“What’s more, as someone who has placed integrity above all other values, the mere suggestion that I would accept a bribe is abhorrent to me, and deeply upsetting to my wife and my children.”

The reputational damage done to the PIC brand following the demise of VBS was “quite severe, especially because the PIC had deployed its senior executives to safeguard its investment”, he said. Both of the directors seconded by the PIC to the lender left the money manager, which oversees about R2.1-trillion, mainly on behalf of civil servants.

A separate investigation into the failure of VBS found that at least 53 people and companies may have benefited from the looting of R1,9bn from the lender before it was taken over by central-bank appointed administrators in March last year. That probe found no evidence that Matjila had taken a bribe.

The portfolio management committee of the PIC turned down an application to put more money into VBS two days before its curatorship, Matjila said. There was no way PIC or even bank regulators could detect what was going on at VBS because they were “deliberately” kept in the dark by colluding executives, he said.

Matjila said he was shocked to hear that the PIC’s losses were larger than expected with VBS, rising from initial estimates of R108m to R350m.

A deal with SA Home Loans (SAHL) was also brought before the commission on Wednesday. Matjila denied he had discussed an origination fee with anyone in relation to SAHL’s application for a second line of credit. These allegations were malicious and may have come about because it was “erroneously believed that I was withholding the approval of the second credit facility deliberately”.

Despite being adamant the PIC, which  was acting on behalf of the Government Employees Pension Fund (GEPF), was not liable for the fee, Matjila signed a letter of cession in 2016 in favour of businessman Kholofelo Maponya, effectively foregoing the GEPF’s rights to the money.

“My understanding was that MMI [Maponya’s consortium] had a contractual arrangement with SAHL, whereby it would be paid a fee for their part of the work done in raising this loan,” said Matjila. 

The PIC had just months before helped Maponya acquire a 25% stake in SAHL and as a result, he had become a director of the company. Maponya maintains he is owed the fee and has since taken the matter up in the courts.   

But on Wednesday before the commission, Matjila said he had reservations about the letter he was signing but trusted it was legally valid as it had been drafted by the executive head for Impact Investing, Roy Rajdhar, and vetted by the PIC’s legal team.

“Commissioner, I do take advice from time to time, even if I have a different view, I go with their advice from time to time,” Matjila said. He admitted that he had not consulted the GEPF to seek approval before doing so.

Matjila described to the commission how Maponya had become a “serious thorn in the flesh of the PIC and me personally” regarding the R45m fee he thought he was owed.

The signing of the letter led to a confrontation between Matjila and Standard Bank SA CEO, Sim Tshabalala.

According to Standard Bank’s legal counsel, Ian Sinton, who appeared before the commission in May, Tshabalala threatened to report Matjila to regulators over the letter. He demanded that Matjila provide evidence the GEPF had consented to the cession. Soon after that encounter, Matjila withdrew the cession letter by written notice. /With Bloomberg