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By Citizen Reporter

Journalist


Survé and Matjila’s friendship painted an ugly PIC picture, inquiry hears

The inquiry into the Public Investment Corporation (PIC) is lifting the lid on how poor investment decisions and alleged favours for pals may have led to billions of rands being wiped off the value of government employees’ pensions.


These decisions included loans that were never repaid and direct shares purchased in overvalued companies, such as AYO Technology Solutions and Steinhoff International Holdings.

Suspended PIC staffer Victor Seanie yesterday revealed how the alleged friendship of the corporation’s former chief executive officer, Dan Matjila, with Iqbal Survé may have led to some of their most controversial, poor investment decisions.

The inquiry, chaired by former Supreme Court of Appeal Justice Lex Mpati, yesterday sat for its sixth day. It was established to investigate whether PIC employees and directors may have used the investment body for personal gain, or to benefit their friends and families.

Yesterday’s testimony focused on a decision in December 2017 when the PIC, which manages the pensions of thousands of government employees, amounting to more than R2 trillion, decided to invest R4.3 billion in AYO Technology Solutions. Independent Media owner Iqbal Survé and his family hold a major stake in AYO and, according to Seanie, former assistant portfolio manager at the PIC, all due diligence went out the window when the deal was finally decided on.

He described an “unreasonably short time frame” taken to decide on AYO’s valuation, along with being unable to negotiate the R43 share price, and a disregard for following the proper channels.

Seanie said the investment in AYO was fraught with irregularities.

The company’s share price has halved since its listing.

Matjila, according to Seanie, was described by Survé as a “good friend” and had apparently signed the irrevocable AYO subscription agreement, and instructed the general manager of listed equities to co-sign without any consultation, treating the investment as a foregone conclusion, according to Seanie.

“I thought signing the subscription agreement was highly irregular because I had never seen it happen before and PMC had not yet approved the AYO transaction,” he testified, saying that all concerns raised by staffers were overruled by Matjila.

Seanie said it appeared that Matjila wanted to help Survé raise funds to cover the R1 billion the PIC invested in Survé’s Independent Media, saying Matjila always gave the impression of trying to use the PIC to help Survé.

“It seems there’s that relationship between Dr Iqbal Survé and Dr Daniel Matjila whereby Dr Dan always takes a favourable view and is willing to help Survé from the PIC in order to do deals, in order to raise money,” said Seanie. “One version, which is a plausible version, is that Survé has this big loan, I think in excess of R1 billion, that he owes to the PIC and he’s struggling to pay it because it’s underpinned by a loss-making business.

“This version suggests he is trying to find ways to get money out of the PIC and inventing and coming up with different business ideas to do that.”

Seanie also gave evidence on the proposed R7.5 billion in PIC backing for the listing of Survé’s other venture, Sagarmatha, which eventually failed.

A history of strange decisions

  • Former PIC board member Claudia Manning, who quit in 2018 over the handling of an investigation into Matjila, yesterday told the inquiry how the PIC had dropped the ball when it acquired a 10% stake in retailer Steinhoff International Holdings.
  • Besides this holding, the PIC had also loaned empowerment company Lancaster 101 more than R9 billion in 2016, to invest in Steinhoff.
  • This led to a R4.3 billion loss by the Government Employees’ Pension Fund, when Steinhoff shares went from approximately R46 per share in December 2017 to its current price of around R1.80, due to revelations of large-scale “accounting irregularities” in the company.
  • The PIC said yesterday it would be investigating two non-executive directors over allegations of impropriety against them.
  • In a statement, the PIC confirmed that the board held a special board meeting on Tuesday evening after having received an e-mail from a whistleblower who went by the name of James Noko, regarding allegations of impropriety that implicate two non-executive directors and the acting chief executive Matshepo More.
  • “Following the recusal of the three affected board members, the board meeting was chaired by the deputy chair, Dr Xolani Mkhwanazi. At the meeting, it was resolved to immediately conduct a forensic investigation into these allegations,” it said. “The board will engage the services of an experienced senior counsel to assist the board with the said investigation.”
  • Business Report published a story yesterday saying that non-executive director Sibusisiwe Zulu allegedly approved transactions worth about R6 billion for her live-in partner, Lawrence Mulaudzi.
  • According to the leaked e-mail from Noko, Zulu has benefited to the tune of more than R600 million in shareholding and well over R100 million in fees through her scheme with the boyfriend. Zulu had the power to approve up to R2 billion.
  • The PIC, Africa’s largest asset manager, has over R2 trillion of assets under management, mostly government employees’ pension funds.

– news@citizen.co.za

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