CAROL PATON: Public has a right to know of PIC’s dealings

It’s not every day that one gets attacked on the front page of two newspapers by a famous doctor with three university degrees. Iqbal Surve, the proprietor of Independent Media, hasn’t enjoyed my reporting and commentary on the Public Investment Corporation (PIC). He says it has been driven by racism and a Goebbels-like tendency to repeat things, and includes a blatant lie.

There is huge public interest in the PIC. It is the biggest asset manager on the continent and the most influential investor in the economy, which makes its CEO, Dan Matjila, arguably the country ’s most powerful man.

There is fierce competition in business, especially among black entrepreneurs, to get funding from the PIC. Because it involves government employee pension money and its board is politically appointed by the finance minister, the PIC is inextricably involved in political power plays. What happens at the PIC matters, and people want to know about it.

In the second half of 2017 an anonymous whistle-blower claimed in e-mails sent to PIC directors and staff that Matjila had assisted a woman called Pretty Louw, who the writer alleged was Matjila’s girlfriend, in two ways: the PIC had given a company called MST, for which she acted as an agent, corporate social investment funds; and Matjila had called up the CEO of a company the PIC had recently funded and asked him to assist her to pay off a debt of R330,000.

It is difficult to read this in any other way than to mean that the Ayo transaction and Sagarmatha, the one that followed, will fall into the terms of reference.

These e-mails set off a chain of events at the PIC that were very damaging internally and harmed its public credibility. At the time, Matjila was under siege from a hostile Treasury, with the change in the finance minister to Malusi Gigaba. Sensing a political plot to remove Matjila, the board closed ranks around him. They gave the allegations a perfunctory look, cleared Matjila and moved on.

But things did not move on, mostly because Matjila retaliated against those he believed had been part of the plot to set him up. Two people were fired, another was paid millions to go away and a fourth remains on suspension after more than a year.

The consequence was a new rush of leaks to the media. Among the most serious was information on the PIC’s deliberations over its investment in a company of Surve’s called Ayo. According to this article, written by investigative journalists amaBhungane, the PIC’s investment committee waived the due diligence process in committing to a R4.3bn private placement in the listing of Ayo. There were several other controversies too, including an extraordinarily high valuation, which was questioned by the market at the time.

All this became public just as Surve attempted to bring a second company for listing, again with the PIC as the main investor. This time the listing was unsuccessful as it did not comply with JSE rules.

The dismissals of staff from the PIC gave fresh legs to the Louw story, setting off a new round of reporting. Each time I reported on it, Matjila’s denial of a relationship was recorded. Eventually, to put the allegations to rest, then finance minister Nhlanhla Nene appointed advocate Geoff Budlender to probe the veracity of the content of the e-mails.

Last week he reported: Matjila and Louw did not have a romantic relationship. Their relationship is nonetheless intriguing. Matjila was introduced to her by then state security minister David Mahlobo, who called Matjila to an urgent meeting at the airport and asked him to help her out. This Matjila did by calling in a favour: he asked a businessman the PIC had recently funded to pay off her R330,000 debt. The businessman did so because, as he said, he did not feel he could say no to the head of the PIC.

Budlender also found that on the occasion Louw acted for MST at the PIC, its application for funds was unsuccessful. Curiously, MST still paid Louw a commission based on a separate application it had made itself, which was successful. For this she got R438,000.

The next inquiry will probe all of the goings-on at the PIC in more detail. On the list are “investment decisions by the PIC [covered] in media reports in 2017 and 2018”, say the terms of reference. It is difficult to read this in any other way than to mean that the Ayo transaction and Sagarmatha, the one that followed, will fall into the terms of reference.

Surve says I’m a liar for saying so. I can understand his fury. After all the controversial transactions done by the PIC over the years, it seems unfair that his specifically will fall under the spotlight. But then, when it comes to the PIC, he has been remarkably lucky.

• Paton is writer at large.