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PIC’s head of internal audit takes the stand …

In three days, we have learnt an (awful) lot about the country’s biggest pension fund.

The inquiry into allegations of impropriety at the Public Investment Corporation (PIC) continued into its third and final day for this week on Wednesday, with the executive head of internal audit Lufuno Nemagovhani taking the stand. His testimony was eagerly received.

This followed an eventful day at the inquiry on Tuesday when the PIC’s executive head of listed investments, Fidelis Madavo, testified that the dubious Ayo Technologies investment had been passed to his team by the PIC’s former CEO, Dan Matjila, as one to consider. The testimony was interrupted by a surprise announcement by the PIC in which it revealed that Madavo had been suspended following an internal investigation. 

Read: Ayo investment passed on by Matjila – suspended PIC exec

When asked about the divisive Ayo Technologies investment and the lack of oversight on an overpriced asset, Nemagovhani confirmed that internal audit had noted some irregularities as the Ayo IPO share subscription form was signed off on December 14, 2017, yet the delegated committee at the PIC only approved it on December 17, 2017.

Nemagovhani said he brought this discrepancy to light in May 2018, but those tasked to investigate the matter only thickened the plot. “I received a management comment [in relation to the Ayo discrepancy] and they indicated that the people who will be responsible for this matter are the CEO, executive head of listed [investments] and the general manager of listed equities.”

So in three days, we have learnt a lot about the PIC. Former CEO Matjila recommended the Ayo deal as per yesterday’s testimony, Madavo goes ahead with it only to get suspended on Tuesday with the PIC citing “a blatant flouting of governance and approval processes”. Only to learn on Wednesday that internal audit saw discrepancies with particular deals but the potential suspects were supposed to carry out the investigation.

And this wasn’t the only dubious transaction to be put into the spotlight.

Pretty Louw and the girlfriend fiasco

Nemagovhani also found himself in the crossfire of Matjila’s alleged ‘girlfriend fiasco’. This matter centres on a loan given by the PIC to Maison Holdings (‘MST’), which was owned by Matjila’s alleged girlfriend, Pretty Louw.

Nemagovhani – as head of internal audit – had to justify whether enough was done in house to investigate the matter. 

“The allegation is that the PIC used corporate social investment money to fund the alleged girlfriend,” he testified. “The amount, in terms of the allegation, was R21 million or R23 million. During our assessment, the execution of the work that we were instructed to do by the board, there was no CSI funding to the alleged girlfriend or MST of the amount of R21 million.”

Nemagovhani did, however, inadvertently acknowledge that MST had received some kind of funding from the PIC. “At the time, when we were performing the [forensic investigation] work we were instructed to do, the loan was being serviced.” This was in response to Gill Marcus’s query as to whether the loan to MST was indeed being serviced.

Whether or not MST acquired the funding through the correct channels is a completely different story.

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