Corrected: PIC chief to continue Labour Court battle to defend the firing of CFO Matshepo More

The Public Investment Corporation (PIC), the state-owned asset management firm that has not had a permanent chief financial officer (CFO) for two years, is moving ahead with filling the vacancy left by the firing of Matshepo More. 

The PIC manages about R2.59-trillion in government pension and social funds on behalf of the Government Employees’ Pension Fund (managing the pension savings of public servants), the Unemployment Insurance Fund and the Compensation Fund. 

PIC CEO Abel Sithole said the asset manager is in the process of appointing a permanent CFO, replacing Matshepo More who was suspended on 20 March 2019 and then fired on 7 October 2021.

“We are interviewing potential candidates to find a permanent CFO. That process is continuing,” said Sithole on Tuesday during the PIC’s results presentation. 

Brian Mavuka, who has been working for the PIC for nearly a decade, has been CFO in an acting capacity since More’s suspension and ultimate dismissal. 

However, the PIC might find itself having to hold back on hiring a permanent CFO after More went to the CCMA to challenge her axing – and won.

In September 2022, the CCMA ordered that More be reinstated to her previous position as CFO. 

On Tuesday, Sithole said the PIC is challenging this ruling at the Labour Court, adding a new twist to the dispute between the firm and More. 

“The PIC found that there were challenges with the arbitration award [that More be reinstated] and the PIC is taking the matter on review at the Labour Court. That matter will unfold in line with the Labour Court’s prescriptions,” said Sithole. 

More was suspended two years ago on full pay, earning R6.9-million during the 2021 financial year. She joined a growing list of PIC executives who faced disciplinary action for concluding transactions that flouted the asset manager’s investment standards and requirements. 

The questionable transactions included irregularities related to the PIC’s investment in AYO Technology Solutions, a JSE-listed company linked to businessman Iqbal Survé.  

Ahead of AYO’s JSE listing in December 2017, the PIC paid R43 a share for a 29% stake in the company – an investment for which the asset manager shelled out R4.3-billion. The PIC was the only investor to subscribe to shares in the company, which are now worth R3 each. 

The deal was mired in controversy as details of the irregular process followed by the PIC emerged in media reports and at the judicial commission of inquiry into allegations of impropriety regarding the PIC. The commission was chaired by retired judge Lex Mpati and is better known as the Mpati Commission.  

Disciplinary action was taken against More, with the previous PIC board, led by chair Reuel Khoza, saying she was subjected “to a number of investigations”, relating to the AYO transaction and lapses in the company’s governance structures. In a press briefing on 28 October 2021, as the term of the previous PIC board came to an end, Khoza said the board was given a report compiled by an advisory panel that found More “guilty of dereliction of duty”.

“The board, upon very serious reflection and review, felt that in fact, the misconduct and dereliction of duty were severe enough to merit her [More] being requested to leave the organisation, which is what in fact happened,” Khoza said at the time. 

The Mpati Commission did not implicate More in wrongdoing relating to the AYO transaction with the PIC. However, the commission found that More and former PIC CEO Dan Matjila displayed “gross negligence” in how the transaction was handled. 

The commission said that by both omission and commission, the two most senior executive directors of the PIC [More and Matjila] demonstrated not only their lack of credibility as witnesses, but their readiness to distance themselves from decisions taken and blame others, including the most junior staff members involved in the transaction. At no point did either acknowledge deficiencies in the process or accept either responsibility or accountability for the investment.”

On More’s conduct, for example, the commission found that she did not question the valuation of R1-billion attached to AYO’s purchase of a 30% state in British Telecom South Africa from a related company within the Sekunjalo Group, Kilomix.

A  disciplinary inquiry between More and the PIC, instituted after the commission’s findings, did not find her guilty on two charges relating to gross negligence and failing to serve in the PIC’s best interests on the AYO transaction.

The hearing found that More did not disclose information to the portfolio management committee on listed investment (of which she was a member as a CFO) at its meeting on 20 December 2017 that a settlement memorandum on the AYO transaction had already been signed. 

The settlement, which would pave the way for the PIC to pay R4.3-billion for AYO shares, was signed a day before the PMC meeting was held.  The hearing also found that it was Matjila (the then PIC CEO) and not More who had the powers to authorise/approve the payment required for the AYO transaction. 

In another favourible finding for More, the hearing found that the PIC did not lead any evidence to show why the disclosure of information (the signed settlement memorandum) by More was required and why the non-disclosure constitutes misconduct or would cause harm to the state-owned asset manager. 

The hearing also found that More acted in the PIC’s interests when she convened an urgent meeting with the portfolio management committee to reconsider the AYO investment. 

Despite being cleared of wrongdoing, the PIC insisted on not reinstating More in her position. More approached the CCMA, 

In her response to Daily Maverick, More said her CCMA award indicated that “it is unknown what was utilised [by the PIC] to charge” her as “there was no investigation report which recommended that” she be charged.   

She claimed that the PIC terminated her employment without providing reasons, thereby rendering the dismissal “inappropriate” and “procedurally unfair.”

The PIC is trying to move on from its governance failures as identified by the Mpati Commission. It remains one of the few state-owned entities that is profitable, with total assets up 2% to R2.6-trillion for the year ending March 2023. 

Board chair David Masondo said the entity had confirmed a dividend of R141-million to government – the PIC’s sole shareholder – for the year under review, and that “fruitless and wasteful expenditure of R1.6-million” that was identified in 2022 was corrected in 2023. DM

Following the publication of this article, Daily Maverick received a Press Council of South Africa complaint from More, who pointed to several inaccuracies contained in the article and omissions. An earlier version of this article failed to mention that the Mpati Commission did not implicate More in any wrongdoing relating to the AYO transaction. The article also did not mention that a disciplinary inquiry did not find More guilty of two charges, relating to gross negligence and failing to serve in the PIC’s best interests. Daily Maverick regrets the errors and omissions.