Former head of South Africa’s largest pension-fund manager to spill the beans

The former head of Africa’s largest pension-fund manager says he was removed from his job so that politically connected people could influence the fund’s investment decisions.

Daniel Matjila is expected to tell a special commission of inquiry on Monday that he was pressured to make deals that didn’t fit with South Africa’s Public Investment Corp’s strategies, according to his prepared statement. Speaking for the first time since his ouster in November, Matjila himself will assert that he was removed deliberately.

The inquiry is into whether the fund, which oversees about $150 billion in assets, deviated from its mission to best safeguard pensions for more than 1 million South African state workers.

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.

The ongoing inquiry has heard from about 70 witnesses – several of whom flagged Matjila himself as playing a key role in approving questionable deals. He has denied that. There’s been no conclusive evidence that PIC officials directly benefited from the fund’s actions.

Attempts by senior politicians and various business people to secure PIC funding go as far back as 2005, when Matjila, 57, became chief investment officer, he said in the statement. He was named chief executive officer in 2014.

Matjila is to say a deliberate plan to remove him became clear after an anonymous whistle-blower made allegations of financial wrongdoing at the fund manager about two years ago.

While the PIC has largely delivered market-beating returns, its mandate also includes aiding broader social development to mitigate the effects of apartheid. This is often done through PIC’s unlisted investments – the category that witnesses have flagged as producing the most dubious deals.

Matjila will respond to accusations on deals including the PIC’s R4 billion investment in Erin Energy; the acquisition of a stake in Total SA by Tosaco Energy; and transactions involving S&S Refinery in Mozambique, Steinhoff International Holdings NV, VBS Mutual Bank and technology company Ayo Technology Solutions Ltd.

He will also talk about a 5 billion rand bridging loan PIC advanced to state power company Eskom Holdings SOC Ltd. on behalf of the Government Employee Pension Fund for one month in February 2018, and he will say his ouster was rushed so that PIC could sign off on a rescue of clothing retailer Edcon Holdings Ltd.

Board Resignations

Matjila also will tell the commission about deals he rejected: with Trillian Capital Partners Pty Ltd, a financial consultancy company linked to the politically connected Gupta family and Regiments Capital Pty Ltd.

In February, almost the entire board, including Mondli Gungubele, the PIC’s chairman and South Africa’s then-deputy finance minister, tendered their resignations after the money manager ordered a forensic probe into whether acting CEO Matshepo More and two non-executive directors had acted inappropriately.

They’ve remained in their posts while Finance Minister Tito Mboweni decides on their replacements.

The commission is expected to make its recommendations to the president by the end of this month. Matjila said the PIC should be made independent of government influence and that deal origination must be properly controlled. He sees the political approaches partly as a result of a mistaken belief that he was solely responsible for whether deals happened.

Chairman Conflict

Former board member Claudia Manning in January told the commission that the PIC would be better off without the country’s deputy finance minister chairing its board because it exposes the continent’s biggest money manager to the perception of political interference.

Matjila will also suggest to the commission that the law governing the PIC act should be changed to ensure independence. The financial services regulator could take charge of the appointment of directors with no government involvement, for instance.

Read: AYO says ‘it has had enough’ and will sue PIC for damages

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Former head of South Africa’s largest pension-fund manager to spill the beans