PRETORIA – Suspended executive head of the Public Investment Corporation’s (PIC) Listed Investments Fidelis Madavo told the commission of inquiry probing allegations of impropriety that he was not aware of the much-reported corruption, particularly singling the investment into tech company AYO Technology Solutions.
“You have seen the terms of reference of this commission, one of the terms is that [we probe] whether there is any alleged impropriety regarding investment decisions by the PIC in the media reports of 2017/18. You know that AYO is one of those [accused]. To your knowledge, do you know of any impropriety regarding investments made and reported in the media in 2017/18?” the inquiry’s evidence leader Advocate Jannie Lubbe SC asked Madavo.
“Absolutely not, and I think I’m proud to say even if there seems to be failures on what we did on AYO, I do not think there will be any tinge of impropriety that will be found. Certainly not that I am aware of,” Madavo responded.
Lubbe asked Madavo to tell the inquiry if he knew of any PIC director or employee who used his/her position or privileges or confidential information to improperly benefit another person.
Madavo, who was suspended on the eve of his appearance at the inquiry, responded: “No. I am not aware of any”.
President Cyril Ramaphosa set up the commission of inquiry, chaired by former Supreme Court of Appeal Justice Lex Mpati, to probe allegations of impropriety at the PIC, the biggest asset manager in Africa, which is responsible for about R2 trillion in government pension and other funds.
Earlier on Tuesday, Lubbe accused the PIC's board of running a parallel investigation and requested that the chairperson of the board be called to explain.
“I put it on record that I find it strange and alarming, that the PIC board is running a parallel investigation into matters covered in particular with the terms of reference of this commission. I will later make further submissions in this regard but my view, with respect, is that it is totally improper,” said Lubbe.
“It may be necessary, even at an early stage to consider calling the chairperson of the board to come and explain to the commission why this is happening. Notwithstanding all this, Mr Madavo is here and has informed me that he is ready to testify.”
Lubbe said the conduct of the PIC board was “totally improper”.
After taking the oath, Madavo told the commission that he had received the letter of suspension on Tuesday morning.
“The reason given was that there was an internal audit, an investigation into the Ayo transaction, and as head of the division, they find it proper to suspend me with immediate effect," said Madavo.
"Further investigations will be ongoing. I must not talk to PIC employees at this stage and that the documentation on this Ayo transaction, which I signed according to the letter, indicate that I should be suspended.
“I also just want to put it on record that this transaction took place when I was overseas. I was not directly involved in this transaction at all, but as head of the division, I carry the responsibility.”
The PIC invests funds on behalf of its clients. Broadly, Madavo said the mandate covers listed equities, listed fixed income securities, cash and money markets, unlisted property, unlisted equity and unlisted debt.
He said the Listed Investments Division, which he was in charge of before his suspension, covers listed equities, listed property, listed fixed income securities, cash and money markets portion of the mandate from the client.
Madavo said listed investments constitute about 80 percent of the assets that were under his management.
During proceedings, Justice Mpati was flanked by his assistants - former South African Reserve Bank governor Gill Marcus and veteran asset manager Emmanuel Lediga.