Public Investment Corporation CEO Dan Matjila. Picture: SUNDAY TIMES
Public Investment Corporation CEO Dan Matjila. Picture: SUNDAY TIMES

Judge Lex Mpati and his fellow commissioners might as well stop now and start writing their final report.

That there was something rotten in the state of the Public Investment Corporation (PIC), the state-owned asset manager entrusted with looking after the savings of government workers, has been evident for a while.

Just when one thought they had heard it all, comes another bombshell. The latest one, revealed by evidence leader Jannie Lubbe, was shocking nonetheless.

Most readers would have had that annoying experience of having misplaced documents of various degree of importance.

It could be a child’s birth certificate when one is about to travel and remembers this might be the one time that department of home affairs officials at OR Tambo International Airport are awake and are therefore likely to ask for the document.  Or maybe it’s the SABC chasing you for that TV licence payment you know you’ve made but have no physical record of.

But a fund manager responsible for looking after R2-trillion of workers’ savings not being able to find evidence of a R3bn investment? That's R3,000,000,000 . Even by the standards of the blatant criminality and disregard for corporate governance that’s been exposed in the various commissions, this will take some beating.

The question that should be asked is: how was this allowed to go on for so long?

“We have been requesting information from the PIC, but to date, we have received no documentation or minutes authorising the investment of $270m,” Lubbe told the commission on Monday.

This was in relation to R3bn that the PIC invested in 2014 to support the listing of Camac Energy, later renamed Erin Energy, a little-known oil company founded by Nigerian businessman Kase Lawal. What is known about Lawal is that he was an associate of former president Jacob Zuma, and even accompanied the latter when he received an honorary degree from a university in Texas, US.

The PIC also issued a guarantee of R1.44bn to facilitate a loan Camac Energy was seeking from a Mauritian bank, ignoring the misgivings of its own oil executive, who wasn’t convinced by the company’s business model and financial sustainability, and, therefore, its ability to meet its obligations.

While it’s hardly breaking news that the period of Zuma’s rule was one of rampant corruption, the individual disclosures still leave one gasping for air. 

The commission has heard about myriad questionable deals that took place at the PIC during the reign of the former CEO, Dan Matjila. The question that should be asked is: how was this allowed to go on for so long?

A lot of questions have to be asked of the PIC’s biggest client, the Government Employees Pension Fund (GEPF). According to the GEPF’s latest annual report, it had accumulated funds and reserves of R1.8-trillion as at March 31 2018. The fund guards the savings of 1.2-million active members and pays benefits to 450,000 pensioners and beneficiaries.

By the most basic performance numbers, the GEPF has done well, with investment returns in 2018 rising to 8.5%, double the previous year’s performance, despite the JSE suffering its worst performance since the global financial crisis.

But what is emerging from the commission suggests that despite channelling 87% of the government workers’ money it is entrusted with to the PIC, the GEPF wasn’t overly concerned with the governance of the latter.

One has to ask what was being discussed in those quarterly meetings that are supposed to be held by the executive committees of the two organisations, which, according to the GEPF’s annual report, were meant to discuss “the execution of the GEPF’s investment management agreement by the PIC.”

The annual report also detailed how the GEPF had to impair the value of loans and investments in companies that have come under scrutiny at the Mpati commission. Those will include Jayendra Naidoo’s Lancaster 101 and Iqbal Survé’s Independent News Media.

It wasn’t that long ago that the GEPF’s principal officer, Abel Sithole, was bemoaning the fact that the fund’s mandate ties it too closely to the JSE and argued that it should be allowed to invest more offshore. It also wants more freedom to put more money in non-public markets.

But it should not be surprised that South Africans will react to that with a degree of scepticism. The apparent lack of vigilance over what was happening at the PIC doesn’t inspire confidence.