11/10/2017 12:44 SAST | Updated 11/10/2017 13:14 SAST

Lessons From Gordhan And Sars: How The Assault On The PIC Will Play Out

The modus operandi in the attack on the Public Investment Corporation seems to be the same as the offensive on Pravin Gordhan and Sars.

Finance Minister Malusi Gigaba.
Gianluigi Guercia via Getty Images
Finance Minister Malusi Gigaba.


So, Deputy Finance Minister Sfiso Buthelezi got his wish and he is now free to pursue his agenda at the Public Investment Corporation (PIC) after his boss, Finance Minister Malusi Gigaba, gave him the go-ahead to launch a wide-ranging and open-ended probe into the institution.

It all smacks of a witch-hunt, with clear indications that Gigaba is licking his lips at the prospect of getting hold of the almost R2 trillion in pension funds under the PIC's administration. He has already dipped into the National Revenue Fund to prop up the failed SAA and needs billions more to make sure that scandal-riven Eskom (and the country's economy) stays afloat. His problem, however, is finding money to do so: international lenders don't want to risk it any more, local banks are steering clear and taxpayers have been sucked dry.

Bloomberg via Getty Images
Sfiso Buthelezi, South Africa's deputy finance minister, speaks during a news conference in Pretoria, South Africa, on Saturday, April 1, 2017. Gigaba�said he will use the National Treasury to push for inclusive economic growth�while sticking within spending frameworks already put in place. Photographer: Waldo Swiegers/Bloomberg via Getty Images

PIC chief executive Dan Matjila followed the example set by former finance minister Pravin Gordhan and went public with allegations of state capture when he told the Sunday Times: "They want to to remove me... they want the keys to the big safe". Gordhan did the same last year when he released a statement asking the public to protect the treasury from attacks after the spreading of "malicious rumours".

The assault on the PIC seems to follow the same modus operandi as previous assaults on Sars and Gordhan's treasury:

1. Rumours about alleged misconduct or illegal activities start spreading

With Sars, it was the High-Risk Investigation Unit (HRIU) bugging President Jacob Zuma's home, while Gordhan was accused of illegally authorising a pension arrangement for a subordinate. Rumours about Matjila appeared after an anonymous email was sent to Buthelezi and "friendly" media organisations.

2. The powers that be announce some or other official investigation into the supposed irregularities

A succession of bodies investigated the Sars unit, while the Hawks investigated Gordhan. Matjila was forced to appear in front of the PIC board to explain himself and will now be the subject of an official investigation.

3. These investigations are often conducted without a clear mandate and are open-ended

Three bodies investigated the HRIU, until KPMG withdrew its findings recently. The Hawks and its disgraced then-commander, Berning Ntlemeza, harassed Gordhan.

4. The investigations are one-sided and their targets often don't get a right of reply

The Sars investigations never heard evidence from the accused, while the Hawks charged Gordhan without any credible evidence. Matjila has on at least three occasions denied any wrongdoing, but the minister has instituted an investigation nonetheless.

5. There are media leaks throughout

During the Sars drama, the Sunday Times was leaked extraordinary tales of illegal activities, most of which it had to retract and then issue apologies. Gordhan was the subject of a continuous smear campaign on social media and in Gupta-owned media. Matjila is being portrayed as someone who channelled R21 million to his "girlfriend's" projects.

6. Suspension and/or dismissal

The investigation into the Sars unit led to a large-scale cleaning out of the taxman's leadership and the loss of expertise and institutional knowledge. The assault on the treasury led to the firing of Gordhan, his deputy and the departure of the long-serving Lungisa Fuzile as director-general. It seems as though Matjila -- the person who holds the keys to the PIC safe -- could be next.

The letter from Gigaba to Buthelezi

Buthelezi has now received the all-clear to take charge of the PIC, which has been reticent (to say the least) to invest in badly managed, money-guzzling and corrupt state-owned enterprises.

Pieter du Toit

Gigaba says in the letter that he has noted "negative perceptions and concerns" about the PIC. The only negative perceptions and concerns in the public domain, however, are those that have been generated by the clear efforts to get rid of Matjila. And those have all emanated from the Gigaba environment, with Buthelezi leading the charge. In fact, the PIC has been lauded for being circumspect in engaging with government about investing in state-owned enterprises.

Pieter du Toit

Gigaba wants the PIC to be depoliticised. Why then is he exposing the entity to political machinations and seemingly acting as an enabler to those wanting to prepare the grounds for the removal of Matjila? This is a classic case of setting up a straw man and then shooting him down. The pending investigation seems to be wide-ranging. Will it be transparent?

Pieter du Toit

From the letter by Gigaba to Buthelezi, it is clear he is looking for a stick to beat down Matjila. He asks that a report, which he has asked for but hasn't yet received, be sent to him. Gigaba also seemingly refers to Matjila (even though he isn't named) and requests that the investigation includes looking into events "that have played out in the public gallery", even though "it has dealt with internally [sic]".

Pieter du Toit

And, as is Gigaba's wont, he ensures that he remains above the fray by reiterating his responsibility as PIC's shareholder. Of course, by saying that he wants to see the integrity of the PIC restored, he means by inference that it has been lost -- more than enough reason to intervene.

Pieter du Toit