Newsdeck

Newsdeck

South Africa’s PIC Skirted Rules by Merging Roles, Inquiry Hears

Public Investment Corporation CEO Dan Matjila says he has the ‘keys to the big safe’ on September 22, 2017 in Johannesburg, South Africa. (Photo by Gallo Images / Sunday Times / James Oatway)

South Africa’s Public Investment Corp. breached the money manager’s own memorandum of incorporation when the positions of chief investment and executive officers were combined under Dan Matjila, a former employee said.

“What could have been the function of the CIO are now sitting with the CEO, and what could have been the functions of the COO are now sitting with the CFO,” Paul Magula, the former executive head of risk and compliance at Africa’s biggest fund manager, told an ongoing commission of inquiry into the PIC on Monday in the capital, Pretoria. “Due to this, all other executives or executive heads became demoted and had no say in decision-making within the PIC. They just have to do as they are told.”

His testimony follows that of several other former PIC employees, who have told the inquiry of long-term friction, division and distrust. The organization, which has assets of more than 2 trillion rand ($139 billion) and manages South African government-worker pension funds, is increasingly under the spotlight as board members, managers and other employees come to testify at the inquiry. Tensions came to a head last month when nine directors resigned en masse, including Chairman Mondli Gungubele, who is also the country’s deputy finance minister.

Executive-committee meetings “were like conversations between the CEO and CFO,” with transactions approved in line with their instructions rather than proper investment evaluation, Magula said.

“It is unheard of for the CEO to have interest in every single deal that gets assessed; in most big investment houses, the CEOs only find out about the transactions when required to do final sign-offs and even then, it is on limited cases. The role of the CEO at the PIC showed the paralysis in the investment process as transactions are not deliberated upon for approval.”

The PIC determined that investment rules were flouted when it bought stock in Ayo Technology Solutions Ltd. stock for 4.3 billion rand. In 2018, the fund manager’s investment valued Ayo at 14.8 billion rand even though its assets were estimated at 292 million rand. Matjila was “so desperate” to have the transaction approved that he returned from leave, Magula said. DM

Gallery

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Daily Maverick Elections Toolbox

Feeling powerless in politics?

Equip yourself with the tools you need for an informed decision this election. Get the Elections Toolbox with shareable party manifesto guide.