When the CEO of a R2 trillion organisation urgently asked businessman Lawrence Mulaudzi to assist an entrepreneur whose business was struggling, the man didn’t ask any questions.
“I never thought of saying no,” testified Mulaudzi before the Mpati commission of inquiry probing issues of governance and malfeasance at the Public Investment Corporation (PIC).
“For me to receive a call from someone like [Dr Dan Matjila], by that time, it was a privilege and I had to honour the request,” he added.
The ‘honour’ was taking R300 000 out of his personal account to rescue the business of a woman named Pretty Louw, who would later be accused of having romantic ties to Matjila.
What adds to the story is that Mulaudzi’s empowerment investment holding company Kefolile Health Investments, by his own admission, “could not be greedy after successfully being funded by such an institution”.
He was referring to a R1.8 billion facility granted by the PIC in June 2016 for the acquisition of shares in Ascendis Health and Bounty Brands.
On top of that, some time before this, in August 2015, another of Mulaudzi’s companies, newly-formed Kilimanjaro Capital, was one-half of another successful R1.8 billion deal to purchase an empowerment stake in oil and gas company Total SA.
The other half of the Total deal was Sakhumnotho, led by businessman Sipho Mseleku.
It emerged, while Matjila was making his submission at the commission, that Mseleku had donated R1 million towards the ANC’s 2016 January 8 event.
Mseleku had done this after Matjila had relayed a request from the ANC’s treasurer-general at the time, Zweli Mkhize, asking for financial assistance.
Mkhize has denied asking the PIC for funding but said it is possible that he may have asked Matjila to buy a seat at the event.
The events were put to Matjila in order to outline the influence of the position he held in the PIC, which manages over R2 trillion in assets, the majority being the pension monies of government employees.
Part of the terms of reference of the commission is to determine whether any PIC director or employee used their position or privileges to benefit themselves or others.
Matjila was a ‘powerful’ man
Matjila, who resigned from the PIC in November 2018, had been at the organisation for 15 years, first as its chief investment officer (CIO) and later as CEO.
When he became CEO, changes within the organisational structure resulted in the CIO position being merged with the CEO position, ultimately making him the most powerful man in the organisation overseeing both the administration and investments of the PIC.
But if you were to ask Matjila, as evidence leader advocate Jannie Lubbe did on Tuesday, whether the office of the PIC CEO was perceived as “powerful” in the investment world, the answer would be no.
“I don’t agree with you,” Matjila said to Lubbe.
“I have a responsibility to guide the big organisation. That I’m powerful … I have a problem with the word ‘powerful’ because I’m not sure what it means, you know – what power? Over who? What makes me powerful, in other words?”
Lubbe pressed on, saying that when Matjila forwarded the funding requests, either from the ANC or Louw, those involved interpreted the action as an instruction rather than a request considering that it was coming from the CEO of the PIC.
Matjila again said no, because the men “had a choice” and could have said no if they wanted to.
But Mulaudzi, under oath, said that while Matjila never pushed for him to assist, he felt under pressure to comply, explaining that as a businessman you had to be careful to not be “ostracised” by Matjila.
“It is known in the investment space that his influence was significant,” he said.
Matjila himself would understand how power dynamics function. Since he first took his place on the stand before the commission he has been at pains to explain how he has consistently come under pressure from politicians and influential business people who wanted to use the PIC as a “piggy bank”.
He even admits to feeling “under pressure” himself to assist Louw because he was initially introduced to her by former state security minister David Mahlobo in a meeting where Mahlobo had asked him to help. This was a finding made by advocate Geoff Budlender when he investigated the matter of Matjila and Louw.
“Managing the expectations of politicians and people of influence is a fine line that I continually have had to negotiate, a tightrope if you will,” he told the commission.
I don’t ‘sell ice-cream’
Matjila went further, saying that Mulaudzi had been enthusiastic about assisting Louw, which is why the suggestion of being “ostracised” and “under pressure” was strange to him.
“If they feel that I’m putting pressure on them they should say so. I don’t know what the problem is in saying ‘I don’t feel comfortable with this’,” said Matjila.
He eventually conceded that when one looks back, it does look like an abuse of power “of some sort”.
He added that, if anything, the perception of being powerful could come from the fact that he was using his power to guard the PIC.
“I think there’s a very interesting saying that says ‘If you want to make everyone happy you must sell ice-cream’ … You know, unfortunately, it’s the nature of the work, I have to be fair, commissioner, in order to protect the PIC as far as possible”.