Former PIC CEO Dan Matjila testifies at the PIC Commission of Inquiry.
Picture: Oupa Mokoena/African News Agency (ANA)
Former PIC CEO Dan Matjila testifies at the PIC Commission of Inquiry. Picture: Oupa Mokoena/African News Agency (ANA)

Steinhoff deal was significant and regrettable, Dan Matjila tells PIC Inquiry

By Noni Mokati Time of article published Jul 17, 2019

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The former head of the Public Investment Corporation (PIC) Dr Dan Matjila has lamented the PIC's investment with global retail company Steinhoff, saying the losses incurred in the deal were "significant and regrettable" adding he took full responsibility for them. 

According to Matjila, during his tenure at the PIC, the state-owned asset manager was provided with an opportunity to buy 3.5% of shares in Steinhoff that carried special voting rights. This deal ensured that the PIC would also secure a seat on the Steinhoff board.  

Matjila said at the time the transaction appeared to be a good idea for the PIC as Steinhoff ranked 5th with the largest stock on the JSE All Share Index before its big collapse in 2017 following revelations of corruption.

Matjila said while the PIC was heavily criticised over its business dealings with Steinhoff, the question posed to the asset manager shouldn't have been "Why was the PIC duped by Steinhoff?" but rather, "Who wasn't duped by Steinhoff?"

"Moreover, the depth and breadth of the carefully orchestrated malfeasance at Steinhoff, committed over several years, is only now beginning to be exposed. There was no way any prudent investor - either here in South Africa or abroad - would have been able to detect any irregularities," he said.

He added that he wanted to ask the question every asset manager who invested Steinhoff was asking and that is "where were the auditors when this malfeasance was being carried out?"

He said like any other investor, the PIC was and will always be dependent on audited reports to make prudent investment decisions.

Meanwhile, Matjila who continued to testify at the Commission of Inquiry into alleged impropriety at the PIC denied allegations that the organisation had funded a business in which Siyabonga Nene, the son of former Finance Minister, Nhlanhla Nene, had a vested interest in and that his father had influenced the deal.

He was giving further insight into the PIC's dealings with several companies including among others, Ascendis Health, oil company S&S Refinery, Steinhoff and Lancaster.

Speaking on S&S Refinery, Matjila said Nene, who served as the chairman of the PIC had introduced him to his son. It was during this time that he learned about S&S  Refinery. Matjila added that Nene later requested him to coach his son on business and investment matters.

"I accepted, as this practice was very common in the private sector," he said. He highlighted that he also advised that Nene junior and his business partner Ameer Mirza seek professional advice to assist them in putting together an Investment Information Memorandum.

Matjila said that he had also aided them in resolving business issues with cement company Afrisam, which supplied clinker for their cement blender company.

Asked by the commission if he was not concerned by a possible conflict of interest in assisting Nene junior simply because his father was the PIC's chairman, Matjila replied: "No, I saw it as knowledge sharing, something that I was passionate about it."

Evidence leader Advocate Jannie Lubbe quizzed Matjila on the formation of the company Zaid International Trade, headed by Mirza. He asked if it was above board and whether the two business partners (Nene junior and Mirza) had been advised to open up a bank account for a facilitation fee to be paid by the PIC? 

Matjila said he wasn't aware of this.

He said an investigation into the deal had been conducted by the Public Protector's office and feedback from the PP had not yet been received.  

Lubbe also asked Matjila if his son had worked for Sekunjalo Investments, owned by Dr Iqbal Survé, based on information that he had received.  A visibly annoyed Matjila insisted that his son had never worked for the company.

Matjila’s testimony also poured cold water on suggestions that the "CEO of the PIC had invested in a dilapidated oil refinery in Mozambique," saying, poor governance, exacerbated by the collapse of the metical against the US Dollar, had caused hardship for the investment and the cost of raw materials had doubled in a short space of time, resulting in the refinery’s inability to purchase sufficient stock.

Matjila is also expected to speak on transactions involving Independent Media Group and Sagarmatha, Ayo Technology Solutions, VBS Mutual Bank, Daybreak Farms, Ecobank, and Transnational Incorporated.


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