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3 minute read
16 May 2019
8:19 am

PIC’s investment of R1.2bn in failed chicken farm unpacked at inquiry


UDM's Bantu Holomisa alleges that 'a cartel of PIC beneficiaries' were being 'empowered continuously'.

Royith Rajdhar of Impact Investing testifying at the PIC commission of inquiry on Wednesday. Image: Moneyweb

The Public Investment Corporation (PIC) is in the process of implementing guidelines that will place limits on the maximum amount it can lend a single borrower or group.

This was revealed by Royith Rajdhar, executive head of Impact Investing, during his testimony at the PIC commission of inquiry on Wednesday. He was unpacking the PIC’s decision to invest R1.2 billion in poultry producer Daybreak Farms in 2015. The business became technically insolvent just six months after the PIC’s investment.

The PIC had been approached by Matome Maponya Investments (MMI), a consortium represented by Kholofelo Maponya.

Maponya was not a first-time client of the PIC, having received at least three other investments from the state asset manager. Rajdhar testified that the PIC had a R480 million investment in his SA Home Loans business, supplied R367 million for an Afgri transaction, and provided a R79 million loan for a project involving affordable housing called Magae Makhaya.

“These amounts were not entirely for the benefit of Maponya, but [were] total amounts in respect of consortiums in which he is a controlling shareholder,” said Rajdhar.

In total, the PIC’s direct and indirect exposure to Maponya amounted to R2.1 billion.


Assistant commissioner Emmanuel Lediga said that based on previous groups that had received funding for multiple transactions from the PIC, and the investments received by MMI, people could suspect the PIC of favouritism.

“Now, through this commission that’s all you hear about – that there [are] people being funded multiple times,” said Rajdhar.

He said the PIC had already developed a ‘single obligor’ guideline that is being tabled through committees at the moment. This document is set to provide guidance on the extent to which the PIC can support a single person or grouping.

The question of favouritism when it comes to approving investments was raised by United Democratic Movement leader Bantu Holomisa in relation to the Lebashe Investment Group and Harith General Partners.

Questionable links

The entities are led by former PIC executive Tshepo Mahloele and former PIC chairperson Jabu Moleketi. The PIC provided seed funding for the establishment of an infrastructure fund by Harith, and extended loans of over R1 billion to Lebashe for transactions involving the purchase of Capitec shares.

Holomisa questioned why the same people were being “empowered continuously”.

“Could it be that there is a cartel of PIC beneficiaries? A deep forensic investigation of these networks and possible links to PIC personnel and directors is recommended,” he told the commission.

The PIC’s R1 billion loan to Independent Media, R4.3 billion investment in Ayo Technology Solutions and a possible R3 billion to Sagarmatha Technologies have also come under scrutiny. All these companies are linked to Iqbal Survé, whose relationship with former PIC chief executive Dan Matjila has been cited as one of the influences behind his success in securing PIC funding.

Rajdhar assured the commission that the operations of Daybreak Farm had been turned around and that the investment was “performing very well” after recording two consecutive years of exceptional profits.

He said the PIC, which is a 100% shareholder in the farm, is looking to dilute its shareholding in the poultry producer to that of a non-controlling shareholder.

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