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PIC’s Matjila to say he was ousted to facilitate Edcon rescue

Matjila to begin testimony at PIC inquiry on Monday.

Daniel Matjila, the ousted chief executive officer of Africa’s biggest fund manager, is expected to say his opposition to funding the rescue of a clothing retailer ahead of national elections was one of the reasons he was dismissed.

Matjila is scheduled to begin testimony to a special commission of inquiry on Monday that will include his assertion that the rescue of Edcon, which supports 140 000 jobs through direct employment and its supply chains, didn’t meet the investment criteria of the Public Investment Corporation’s clients, according to his prepared statement.

Read: PIC tried to conceal staff dissatisfaction, inquiry hears

On the day he was ousted, November 23, he met the chairman of the PIC, the country’s economic development minister and the CEO of Edcon to put forward the conditions for supporting the deal, he is expected to say at the inquiry. Those weren’t viewed favourably, he said.

The ongoing inquiry has heard from about 70 witnesses — several of whom flagged Matjila as playing a key role in approving questionable deals. He has denied that. President Cyril Ramaphosa ordered the investigation in October last year, one of a handful he’s instituted to probe alleged graft since taking office 16 months ago after Jacob Zuma’s scandal-marred nine-year rule.

Union pressure

In February, a senior official of the Congress of South African Trade Unions emailed the chairman of the PIC, who was also deputy finance minister at the time. He wrote that unless the PIC supported the rescue, the labor federation wouldn’t be able to encourage its members to vote for the ruling African National Congress party in May elections.

The rescue was announced a week later, with the PIC leading the R2.7 billion rescue. It used R1.2 billion of money from the Unemployment Insurance Fund, one of its clients.

Matjila is expected to say he was removed, at least partly, to ensure the Edcon rescue could take place. He cited the email, from Cosatu’s Parliamentary Coordinator, Matthew Parks, as evidence.

Matjila asserts that he and the PIC’s then head of private equity, Mervin Muller, maintained they would only back the rescue if Long4Life’s proposal to invest R500 million in the deal went ahead. Long4Life is led by Brian Joffe, a veteran South African businessman. The company didn’t invest.

While the bailout would have rescued jobs it was unlikely to generate adequate returns, according to Matjila.

The PIC on Thursday denied that the decision to invest the funds was politically influenced. Mondli Gungubele, the former deputy finance minister and chairman of the PIC, hasn’t responded to phone calls and text messages about the Edcon deal. Parks said in an interview that the mandate of Cosatu was to protect jobs and he would do the same again.

© 2019 Bloomberg L.P.

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One would assume, nay hope, nay pray that Dan applied said same due diligence when investing PIC funds in say, Mandela’s personal physician’s media empire?

I am uncertain who more deserves to be tarred and feathered : Dan or his lawyers?

Why would any investor put over a billion into a marginal business such as Edcon. I would really love to know.

Amazing-things just happen.. Rmillions and Rbillions are paid out but nobody knows anything. I was in charge but it was not me. Was my deputy.I was overseas/on holiday.It was the CFO or COO or BBC.The dog ate my homework(as somebody said).Africa disease. Nobody is ever accountable.Tragedy of the Commons as Sensei has often said.

Dan the Man showing no shame as ever.yes Edgars may have been a marginal case given its parlous position,but you still had a going concern under a a very strong leader who is a winner by nature.The numbers of people employed and a clear strategy to turn it around suggested that their was enough substance to warrant a bailout.Compare it to the Ayo deal which was literally all hot air.Wont forget how Surve patronised Matjila on TV saying it was sad that a black professional was being marginalised after Matjilas ousting.The wheel turns -Dan is yesterdays man and Surve is running scared

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