The Lex Mpati Commission can’t start soon enough
By Ed Herbst
Public Investment Corporation (PIC) CEO Dan Matjila did not have a romantic relationship with a woman named Pretty Louw, but he did intervene inappropriately on her behalf at the behest of then intelligence minister David Mahlobo.
Carol Paton Business Day 17/10/2018
President Cyril Ramaphosa on Wednesday published broad-ranging terms of reference for the judicial inquiry into the Public Investment Corporation (PIC), which he said will be headed by retired judge Lex Mpati.
Carol Paton Business Day 17/10/2018
On 17 October Carol Paton had two articles about the scandal-prone Public Investment Corporation (PIC) published in Business Day.
One revealed that Dr Dan Matjila, CEO of the PIC had bowed the knee to one of the most-dodgy politicians in our recent history. The second revealed that President Cyril Ramaphosa had established a commission of inquiry into Matjila’s stewardship of supposedly sacrosanct civil servant pension funds intended to provide them with the best-attainable quality of life in their twilight years.
The moment advocate Geoff Budlender revealed that Matjila had succumbed to pressure from an ANC MP, he justifiably brought down the curtain on Matjila’s career.
Matjila, like former President Jacob Zuma, hoped to see out his contract and dictate the terms of his departure but the PIC board terminated his employment with immediate effect.
There is nothing unusual in civil servants being pressured to grant multi-million rand loans by ANC deployed cadres – ask alleged Gupta associate, Ben(‘Baby Mama’) Martins, he’ll tell you – but it was whose orders Matjila obeyed that had you searching for the spittoon and reaching for the barf bag.
It was David Mahlobo aka ‘Mr Signal Jammer’ who is alleged not to treat his drivers well but is fastidious about having his nails manicured at what Victorians might well have described as a bawdy house and who was fingered in an Al Jazeera documentary about rhino poaching.
Then there was the R7.5 million of civil servant pension money used as a severance settlement which the PIC paid to chief IT executive Vuyokazi Menye – even though it was acknowledged that she had done nothing wrong. She will, hopefully, be one of those who testify before the Mpati commission.
That, in my subjective opinion was the least of it. I refer to the tragic sequels to the billion rand PIC loan to Iqbal Survé which bought the ANC control of the biggest group of English newspapers in the country.
The ‘must ask’ question in this regard relates to the complete absence of the due diligence concept in this decision by Matjila.
Then there were the questions about the integrity of Survé’s business practices as Anton Harber noted at the time:
It is not the first time Dr Survé has faced such questions. Last year, when his controversial state marine tender was withdrawn in the face of a court action, he listed 31 SMEs which he said would suffer as a result. Media24‘s investigations team reported that they had tried to contact all 31, and almost all of those they could trace had no idea they were part of the Sekunjalo bid. Two companies threatened legal action against him for using their name without their knowledge.
What Matjila also ignored was Survé’s collaboration with his friend, confidante and business associate, Brett Kebble to bribe members of the ANC Youth League with stolen money and his involvement in the Leisurenet scandal as outlined by Peter Flack.
Two years after Matjila granted the billion rand loan, an investigation by James Myburgh revealed that Sekunjalo was making no attempt to repay the loan and that the interest was mounting. Three years thereafter, Tito Mboweni told parliament that the situation was unchanged.
Despite all of the above and despite the fact that the PIC, without providing proof, alleged that it was seeking to extricate itself from the billion rand unpaid loan, Matjila and his acquiescent board then quadrupled down and granted another hugely controversial loan – R4.3 billion rand – to Iqbal Survé’s Ayo Technologies company.
Right from the start this loan generated controversy with Dewald van Rensburg of City Press alleging that normal due diligence practice had been abandoned yet again in another questionable investment in one of Iqbal Survé’s companies.
What return are the GEPF members getting on these investments by Matjila?
The answer is apparently zero on the investment in Sekunjalo Independent Media and, in a follow-up article, van Rensburg reveals how the R4.3 billion rand loan to Ayo Technologies is being used.
Here is a relevant extract:
Ayo Technology Solutions banked about R227 million in interest by the end of August from the controversial R4.3 billion investment it got from the Public Investment Corporation (PIC) late last year.
Now it is paying out R100 million in dividends, despite virtually all its profits stemming simply from the interest earned on the PIC money.
Its profits shot up 390% from R40 million to R196 million for the financial year to the end of August.
However, this was due to “investment revenue” of R227 million in the financial year.
This appears to simply be eight months’ worth of interest on the PIC money sitting in the bank.
If the interest earned on the PIC money up to the end of August is annualised, it comes to an interest rate of 8%.
That is equivalent to the interest anyone would earn on a short-term fixed deposit in a savings account.
Without the interest from the PIC cash, Ayo’s underlying financial results are actually pretty dismal.
Unethical news practices
The Economist, in June 2015, was the first to place the international spotlight on the unethical news practices of the new management of a once respected newspaper company.
Here is the concluding paragraph from that article:
Since the takeover readers of the Independent’s once-feisty titles, which include the Cape Times and the Star, have seen a distinct change in coverage. Besides displaying an odd predilection for puff pieces about Dr Surve it has become markedly less critical of the government. Dozens of senior journalists and editors have left or been sacked. The group’s executive editor, Karima Brown, was recently pictured at an ANC anniversary rally dressed in an ANC hat. With editors and owners like these, who needs censorship?
More recently, Al Jazeera journalist Azad Essa outlined how Iqbal Survé had collaborated with his Chinese shareholders in suppress media freedom in South Africa. For more context read the article by Tatenda Gwaambuka.
The fact that Iqbal Survé has, according to Tito Mboweni, made no attempt to repay the PIC loan reinforces my perception that Matjila was pressured into a deal which made no sense given his mandate to get the maximum safe return for the civil servants whose monthly pension fund deductions provide the PIC with its working capital.
The cost of the PIC investment in Sekunjalo to buy the Indy newspapers has been appalling – read Ricky Stoch’s account of how it impacted on UCT and beyond.
Then factor in the reputational cost to the Western Cape wine industry which was falsely accused by the Cape Times of driving a genocidal campaign to induce wide-scale foetal alcohol syndrome among farm employees by utilising the illegal tot system.
Add to that the personal cost of people like Chad de Matos who, innocent of any crime, ended up in one of the world’s dangerous prisons, Pollsmoor, or Jan van Tonder, another innocent victim of Cape Times editor, Aneez Salie’s constant attempts to portray whites as racists and Cape Town as a racist city.
The steps taken by Cyril Ramaphosa to expose Zuma–era corruption deserve the highest praise but, if the Mapati Commission does not call Iqbal Survé to testify it will, in my subjective opinion, have as little credibility as the Seriti Commission.