Daniel Matjila. Picture: TREVOR SAMSON
Daniel Matjila. Picture: TREVOR SAMSON

The judicial inquiry into the Public Investment Corporation (PIC), gazetted by President Cyril Ramaphosa on Wednesday, is to be welcomed. However, it is clear that it will be very limited.

Ever since 1999, when the PIC took a decision to invest a portion — now 10% of its portfolio, which has a value of R2-trillion — of its funds in private ventures, there has been talk of political favouritism in deal selection and corruption. Part of the PIC’s mandate for these investments, which it derives from its biggest client, the Government Employees Pension Fund, is to promote transformation of the economy and development that benefits ordinary people.

Given the symbiotic relationship between BEE and political influence, it is not surprising that the PIC has repeatedly found itself in the hot seat, adjudicating investment bids from competing groups of politically connected entrepreneurs or in some cases people who are known proxies for politically powerful people.

The PIC in this time has also developed a shadowy relationship with the ANC, which is only glimpsed occasionally — for instance, when risky and questionable deals are entered into seemingly at the behest of politically influential people. Political heavyweights like the ANC treasurer-general are now and then outed as the brokers of deals, but for the most part play an influential behind-the-scenes role.

For instance, in a separate inquiry into PIC CEO Dan Matjila by advocate Geoff Budlender, which was completed this week, it emerged that Matjila met with then minister of state security David Mahlobo on at least four occasions and felt compelled to do favours for a woman whom Mahlobo had personally introduced to him.

It is for these reasons that UDM president Bantu Holomisa has said that a commission of inquiry into the PIC will make the Zondo commission look like a Sunday picnic.

Sadly, this is not the commission that is going to bring skeletons tumbling out of cupboards. The terms of reference have made quite sure that it will not be the ANC, its fundraisers, its luminaries or their proxies who are going to have their business dealings scrutinised. Instead, with the exception of a few controversial transactions, the focus of this inquiry will be the people at the PIC.

The terms of reference range from governance issues and the board’s conduct to very specific human resources and internal procedure issues. The question seems to be whether directors, staff members and Matjila himself behaved appropriately through this period, and whether any inappropriately benefited.

The terms of reference limit the transactions that will be scrutinised to “investment decisions by the PIC in media reports in 2017 and 2018". That is a very tight scope and includes little more than its investment in Iqbal Surve’s Ayo; the proposed investment in Surve’s Sagarmantha; the S&S refinery in which Nhlanhla Nene’s son Siyabonga was involved and perhaps the investment in Erin Energy.

The rest of the terms of reference are in parts quite specific, apply to the period 2015-2018 and seem to focus on probing what has gone wrong at the PIC over the past three years. The PIC has been rocked by internal instability and mistrust. Part of that has been an anonymous e-mail campaign aimed at discrediting Matjila; and part of it has been Matjila’s vendetta against staff he believed were part of a conspiracy against him.

For those disappointed that the inquiry will not dive deep enough and deal with the political rot, there is some consolation. A third part to the terms of reference proposes an examination of the operating model of the PIC, including the composition of the board, its investment decision-making framework and its delegation of authority. This will include advising on whether any legislative changes are needed.

This is a vitally important matter. The PIC is the most influential player in the economy and the largest single pot of money. Answers to how and where it invests that money, who makes those decisions, how unlisted investments are disclosed and whether the PIC should continue to be able to invest directly in the private equity arena will have an enormous bearing on the limitation of opportunities for corruption in the future.