AS IT HAPPENED: EX-PIC head Dan Matjila says he never influenced transactions

11 Jul 13:00

No room for undue influence of investment decisions - Matjila

Ex-PIC CEO Dan Matjila said he did not influence investment decisions of the asset manager.

Matjila made his fourth appearance before the commission led by Justice Lex Mpati on Thursday. The inquiry adjourned at 12:00, and Matjila is expected to return next Monday, July 15 to continue his testimony.

Matjila told the commission that the PIC is viewed by some as a "tempting piggy bank" as it sees over R2trn in funds. Despite this, the PIC has not become a piggy bank, Matjila confirmed to Commissioner Lex Mpati.

The investment process, asset selection is very stringent. An asset will be taken on the books if it meets the minimum requirements. "That's how we deal with the risk of it being a piggy bank," he told the commission.

When asked by assistant commissioner Gill Marcus if the checks and balances the PIC has put in place have been enforced, Matjila said investments are screened and go through rigorous due diligence. No single person at the PIC can make an investment decision on his/ her own, he added. "The checks and balances to police this are as robust as they possibly can be."

Matjila explained he cannot influence transactions as they are dealt with by different teams. There is a lot of work that goes into a transaction and final approval that he is no involved in, it is done independent of the office of the CEO. "I don't get involved at all."

He also told the commission that he has never pressured his staff to push through transactions. "I was actually quite shocked that people were making statements that I was pressurising them."

Matjila's legal team had also informed the commission they received a Nexus report concluding that he received a VBS loan. Matjila and his team still reject this finding or claims that he received a loan.  

11 Jul 12:56

Mkhize: I have never asked the PIC to fund the ANC

Former ANC Treasurer-General Zweli Mkhize says he did not request funding from the PIC nor any other state-owned entity for the ANC January 8 statement.

Mkhize issued the statement on Thursday, in response to the testimony of former PIC head Dan Matjila before the commission of inquiry on Wednesday.

Matjila had told the commission that he received requests for funding from politically-connected people, from all political parties and not just the ruling party.

He particularly gave an example of how the PIC was asked by a "top ANC official" to assist the ANC for its January 8 statement. But Matjila explained the asset manager cannot get involved in the funding of the ANC.

Matjila said the official, whom he would not name, asked Matjila to refer the request to other possible entities who had been funded by the PIC. Matjila then referred the request to businessman Lawrence Mulaudzi for assistance.

11 Jul 12:11

The inquiry adjourns.

It will resume from 09:30 on Monday, July 15.

The GEPF is expected to provide evidence, and Matjila is expected to continue his testimony from 14:00.

11 Jul 12:07 Mpati says that the evidence presented by Mulaudzi and Matjila seems to be contradictory. 
11 Jul 12:06

Mpati asks why Muaudzi asserts he was forced into a merger.

Matjila says: "I don't know what the nature of the force is. He could have simply refused."

11 Jul 12:04

Mpati asks if the two companies decided to merge out on their own.

Matjila says all he told the two parties is that a binding letter could not be issued.

11 Jul 12:03

Matjila said he told Mulaudzi that a binding letter of expression of interest could not be issued.

There was another competing company. 

11 Jul 12:02

Mpati asks if Matjila had asked for a merger.

Matjila said he never mentioned a merger- but it was in his mind.

Mpati says that in Mulaudzi's testimony that Matjila told him to merge.

11 Jul 12:01

Lediga asks why Matjila could not choose between the two companies - Matjila says it would be like catching a falling knife.

11 Jul 12:01

Matjila said he could not choose between the deals presented by Mulaudzi and Sakhumnotho. 

"It was a hard one. I could not choose between the two of them, at the time."

A possibility of a merger would have been best. 

11 Jul 11:56 Matjila says he does not get involved in due diligence processes. He was assured by the team involved that they had done the work. 
11 Jul 11:50 Marcus notes there is a different testimony on the same matter from Mulaudzi.
11 Jul 11:50

However, there appeared to be lack of communication and working in silos which resulted in three competing consortiums being promised support by the PIC. 

including non-binding letters of support.

Mulaudzi was hounding Matjila for a binding letter of support.

11 Jul 11:46 An engagement letter was issued by the PIC to KiliCap in July, Matjila says.
11 Jul 11:46 Matjila says a binding letter must have conditions for the pricing to be set.
11 Jul 11:43

Whoever gets the exclusivity - then a binding letter of expression of interest is issued.

This is usually issued before a stage of prices is set. 

11 Jul 11:41

Matjila explains when someone approached PIC for funding - and if the information makes business sense to pursue by the team - a letter of interest is sent.

At a stage of due diligence- then an expression of interest confirming the deal is being done is issued. A sponsor must be recruited to support the expenses of the deal and an engagement letter is issued.

This ties the parties, but there are escape clauses to allow the PIC to exit. 

The PIC must also allow the sponsor exclusivity.

If there is a competitive bidding process- no strong letters of interest are issued. Only letters of support are issued, to all the bidders. 

11 Jul 11:37 Matjila said he was surprised to learn of this in evidence presented to the commission.
11 Jul 11:35

PIC provided KiliCap a letter expressing interest in June 2015 - which could be used by them to make a bid for Tosaco.

Nedbank had issued KiliCap a similar letter.

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