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Finance Minister Nhlanhla Nene will take “decisive steps” to address the Public Investment Corporation’s governance issues and allegations against the PIC chief executive before the end of this week.
Nene said the measures “will ultimately strengthen the PIC’s governance and restore public trust in this important public institution”.
In May, Nene asked the PIC board for a detailed response (including relevant documents) to the allegations raised in the media, all internal audit and other reports relating to these allegations, and the board’s view on whether disciplinary action should be taken against chief executive Daniel Matjila and other PIC executives.
The South African Police Service has also been investigating corruption against the leadership of the PIC.
Read: SAPS called for PIC corruption evidence
The PIC, which is one of the continent’s largest asset managers, manages R1.9 trillion in funds on behalf of a number of government entities. Its largest client is the Government Employees Pension Fund. The PIC is also one of the largest owners, on behalf of its clients, of JSE-listed companies.
The corruption case relates to allegations that Matjila influenced the PIC to fund a company that benefited his alleged lover, Pretty Louw.
The second part of the case revolves around the payment of a sum of R300 000 to Louw by a different company, Ascendis, which is represented by businessman Lawrence Mulaudzi.
This payment was supposedly made under Matjila's instruction.
In addition to this, a former executive at the PIC is being accused of irregularly fiddling with the bonuses paid to employees, in order to retain R44 million.
Read: PIC hit with more claims
The PIC made more headlines this weekend when City Press reported that two of its executives, Paul Magula and Ernest Nesane, allegedly received monthly payments from Vele Investments for more than a year, amounting to around R5 million each.
Read: PIC duo’s shady payouts
This was while they were the PIC’s non-executive representatives on the board of VBS Mutual Bank, which Vele was allegedly busy looting into the ground at the time
Read: How PIC men got paid
The PIC is also alleged to have invested R90 million into VBS late last year when the bank conducted a rights issue, an invitation to existing shareholders to buy more shares in the company.
On Monday, Nene said he had completed the review of the documents and evidence regarding the governance issues at the PIC, as well as the allegations against Matjila.
“Taking these into account, as well as other developments that have unfolded recently, I will announce the decisive steps to be taken to address the PIC’s governance issues and allegations against the PIC chief executive before the end of this week, after I have met with the PIC’s board of directors.”
Nene was aware that “some in our society” believed he had taken a long time to deal with the PIC matters.
“However, the need for transparency and accountability in dealing with state-owned entities must be balanced against the need to follow due process and ensure that proper governance is observed,” he said.
“When the board and management of the entity fail to live up to expectations, the shareholder ministry should intervene appropriately, following due process,” Nene said.
Political office bearers should not act in a manner that undermines good governance and due process, he added.
“Indeed, it is the meddling in the affairs of state-owned entities, the second-guessing of the decisions of the governance structures of these entities, and failure to adhere to good governance practices, that have contributed to the mismanagement of state-owned entities and enabled the malfeasance that we have seen.”
