FORMER Public Investment Corporation (PIC) chief executive Dan Matjila testifies at the PIC Commission of Inquiry yesterday. Oupa Mokoena African News Agency (ANA)
Former Public Investment Corporation (PIC) chief executive Dan Matjila yesterday laid bare the machinations that governed the asset manager's funding programmes in the last few years of his reign, telling Judge Lex Mpati’s Commission of Inquiry how the politically connected tried to strong-arm the corporation for funding.

Matjila explained how former South African Airways (SAA) board chairperson Dudu Myeni tried to force the PIC to finance the struggling airline, and how the National Empowerment Fund (NEF) used its proximity to power to secure funding. He said Myeni wanted the PIC to invest a R6billion in the national carrier in 2017.

Matjila said although the task of procuring funding for state-owned entities (SOEs) was normally handled at executive level, Myeni, a non-executive director, tried to force the PIC to fund the ailing airline.

“It is unusual for the chairperson of an SOE, or any company for that matter, to request funding. Normally, this is a function of the chief executive or the chief financial officer. Ms Myeni is an extremely prominent political figure whose close ties to the (then) President Zuma were publicly well known,” Matjila said.

“There was an overt expectation of funding, and I was aware that the PIC had been targeted in SAA’s rescue plan as potentially providing funding. I informed Ms Myeni that the PIC would first have to go through with the mandatory necessary investment investigations and processes, with which she seemed clearly unhappy.”

When pressed by Gill Marcus, one of the commissioners, as to what SAA wanted to do with the multibillion-rand funding, Matjila said it had to do with SAA’s turnaround plan.

The board embarked on a turnaround plan based on five pillars.

Matjila said the PIC did not ultimately fund SAA due to the airline's low investment-grade rating.

However, Matjila said the PIC had to bend over backwards to accommodate the NEF’s request for R3bn, despite initially rejecting a request in 2016 for R1bn after it fell short of the investment requirements.

He said once former deputy finance minister and former PIC chairperson Sfiso Buthelezi joined the National Treasury in 2017, the NEF came back with the R3bn proposal.

“PIC did a second and fresh look at the proposal, expanding the net to cover a wider number of SOEs in this space, for example. NEF still failed the test. The chairperson (Buthelezi) intervened at the infamous airport meeting of September 7, 2017.”

The NEF chief executive Philisiwe Mthethwa is Buthelezi’s sister. She is married to Arts and Culture Minister Nathi Mthethwa.

Matjila accused former executive head of risk Paul Magula of watering down the risk report to favour the approval of NEF’s application after the first one failed to meet the test. “There was a period of only three months between his initial and second reports, and in this period of time nothing had changed operationally at the NEF.”

Magula left the PIC in shame last year after he was found wanting in the collapse of VBS Mutual Bank.

The PIC held a 25 percent stake in VBS, and Magula served as one of two delegated directors on the board of the bank.

He was found to have pocketed millions of rand in undeclared loans from VBS following a forensic investigation by advocate Terry Motau.

BUSINESS REPORT