Chairperson of the inquiry, former president of the Supreme Court of Appeal, Justice Lex Mpati,

PRETORIA – The evidence leader at the inquiry investigating the Public Investment Corporation (PIC), Advocate Jannie Lubbe, SC, on Tuesday accused the asset manager's board of running a parallel investigation and requested the chairperson of the board be called to explain. 

Lubbe told the commission of inquiry set up by President Cyril Ramaphosa to probe allegations of impropriety at the PIC, chaired by the Supreme Court of Appeal judge president Lex Mpati, that the board has suspended executive head responsible for Listed Investments, Fidelis Madavo, on the eve of his appearance at the inquiry being held in Pretoria. 

“I put it on record that I find it strange and alarming that the PIC board is running a parallel investigation into matters covered in particular with the terms of reference of this commission. I will later make further submissions in this regard but my view, with respect, is that it is totally improper,” said Lubbe. 

“It may be necessary, even at an early stage to consider calling the chairperson of the board to come and explain to the commission why this is happening. Notwithstanding all this, Mr Madavo is here and has informed me that he is ready to testify.” 

Lubbe said the conduct of the PIC board was “totally improper”. 

After taking the oath, Madavo told the commission that he had received the letter of suspension on Tuesday morning. 

“The reason given was that there was an internal audit, an investigation into the Ayo transaction, and as head of the division, they find it proper to suspend me with immediate effect. Further investigations will be ongoing. I must not talk to PIC employees at this stage and that the documentation on this Ayo transaction, which I signed according to the letter, indicate that I should be suspended,” said Madavo. 

“I also just want to put it on record that this transaction took place when I was overseas. I was not directly involved in this transaction at all, but as head of the division, I carry the responsibility.” 

The PIC invests funds on behalf of its clients. Broadly, Madavo said the mandate covers listed equities, listed fixed income securities, cash and money markets, unlisted property, unlisted equity and unlisted debt. 

The Listed Investments Division led by Madavo covers listed equities, listed property, listed fixed income securities, cash and money markets portion of the mandate from the client. He said listed investments constitute approximately 80 percent of assets under his management. 

Justice Mpati was on Tuesday flanked by his assistants - former South African Reserve Bank governor Gill Marcus and veteran asset manager Emmanuel Lediga. 

Last year, President Cyril Ramaphosa appointed the commission to probe allegations of impropriety at the PIC, the biggest asset manager in Africa, which is responsible for managing almost R2 trillion in government pensions and other funds. It has been mired in controversy regarding some of its investment decisions.

Among the 16 terms of reference, the commission must probe whether any alleged impropriety regarding investment decisions by the PIC in media reports in 2017 and 2018 contravened any legislation.

The commission must also probe whether PIC policy or contractual obligations resulted in any undue benefit for any PIC director or employee or any associate or family member of any PIC director or employee at the time.

Ramaphosa also wants the commission to probe whether investment decisions at the PIC resulted from ineffective governance and/or functioning by the board, or whether any PIC director or employee used his or her position or privileges, or confidential information, for personal gain or to improperly benefit another person.

The period under investigation is January 1, 2015 to August 31, 2018, but the commission has also been given leeway to work outside these dates. An interim report has to be submitted to Ramaphosa by no later than February 15 and a final report by not later than April 15 this year.

The public hearings will this week run until Wednesday.

- African News Agency (ANA)