Day one of former Public Investment Corporation (PIC) chief executive Dan Matjila’s testimony at the commission of inquiry got off to an uneventful start on Monday, with the former head focusing mainly on the role he played in turning the PIC into South Africa’s biggest asset manager.
Matjila had been at the PIC for 15 years after being seconded to the institution as a risk manager by then CEO Brian Molefe in 2003. He became chief investment officer in 2005, and CEO in 2014.
He took the commission through the state asset manager’s corporatisation and how he was instrumental in turning the institution from managing just over R300 billion when he arrived to having over R2 trillion in assets under management at the time of his departure in 2018.
However, Matjila’s much-anticipated testimony was cut short because he had only provided the commission with his final 227-page statement on Friday afternoon. On Monday the commission said it was yet to receive his complete bundle of annexures after Matjila’s counsel faced difficulties obtaining the relevant documents from the PIC.
The judicial commission of inquiry, appointed by President Cyril Ramaphosa in October 2018, said it had agreed with Matjila as early as December 2018 that he would appear and that the date of his testimony had also been finalised well in advance.
The commission also hit back at media leaks of Matjila’s evidence with commission chair Lex Mpati calling it “unacceptable”. While the inquiry will not be investigating the source of the leak, it ruled that his statement will only be publicly released in bits and pieces.
Edcon, the straw that broke Matjila’s back
On Monday Matjila’s testimony focused mainly on his personal and professional background. He painted a picture of a man who learned to be “prudent” with money at an early age when he was saving money to go to university.
“This is something that has stayed with me all my life,” said Matjila. “I am equally prudent with other people’s money.”
According to reports by Bloomberg, Matjila is expected to testify that he was forced to leave the institution partly because he was opposed to the PIC providing rescue funds to distressed retailer Edcon. Apparently, Matjila did not think an Edcon bailout had any investment merit, saying that while jobs would be saved, the deal would not produce adequate returns.
While he did not elaborate on the Edcon deal or his departure on Monday, Matjila did allude to a possible “conflict of interest” regarding former deputy finance minister Mondli Gungubele’s involvement in the R2.7 billion Edcon transaction.
Appearing before the commission in June labour federation Cosatu’s Matthew Parks testified that earlier this year the union had to intervene to save jobs at Edcon by contacting Gungubele directly because they were unable to reach acting CEO Matshepo More and other PIC executives.
The union is reported to have threatened to not vote for the African National Congress (ANC) in the May elections unless the PIC bailed out the company and saved workers’ jobs.
Matjila told the commission that the deputy finance minister, who is by tradition the chair of the PIC board, did not have a lot of say in investments made the PIC. The chairperson’s involvement is limited to investment decisions that are above the delegated authority of the investment committee (usually above R10 billion).
Matjila also touched on the issue of political interference, saying he believes the deputy minister shouldn’t get involved in investment decisions because the PIC is a major investor in the bonds of state-owned companies.
“There would be a conflict of interest in the chairperson [who also represents the state] being involved in the very enterprises that fall under the purview of the finance ministry,” he said.
Cosatu: Matjila’s allegations “laughable and delusional”
Cosatu hit back at the reports regarding Matjila, saying the former CEO’s resignation was precipitated by a series of allegations of corruption during his tenure at the PIC that compelled him to resign – and not an email by from the union.
“Cosatu and its affected clothing and retail affiliates became involved in the Edcon engagements in late January 2019,” said the union in a statement. “A whole two months after Matjila’s resignation!”
The union said it was strange how it took Matjila nine months to have an “epiphany” that it was Cosatu that was behind his “long overdue resignation”.
“It’s very difficult to try to string the dots of this chronological gymnastics,” charged Cosatu. “Perhaps Dr Matjila is a member of the flat earth society.”