Former Public Investment Corporation (PIC) CEO Dr Daniel Matjila has told of how the collapse of cement company AfriSam, "created serious tensions between the PIC and GEPF (Government Employees Pension Fund)."
According to Matjila, the PIC concluded a BEEE transaction 11 years ago when it spent R6 billion, as means of acquiring a 85% stake in the company that was owned by Holcim and the Aveng group at the time.
He, however, told the Mpati Commission of Inquiry that the global economic crisis in 2008 resulted in a significant erosion of the value of the PIC investment in AfriSam. He said by the end of 2010, the valuation on the original investment had dropped to R1.2 billion.
"In response to this negative situation, the PIC Board instituted a process of restructuring of the AfriSam balance sheet to save it from total collapse, which would, without doubt, have resulted in job loses measured in thousands."
Matjila said when the restructuring was concluded in 2013, up to 2000 jobs were saved.
He said in his arrival as an executive, Elias Masilela had been instrumental in reducing the tensions, by improving communication channels between the PIC and GEPF.
"The PIC performed well under his leadership but, there were issues that the board had raised," he said, which resulted in his departure from the asset manager in 2014.
Matjila also delved into the acquisition of Independent Media by the Sekunjalo Group. He highlighted that the transaction was funded by the PIC and the Chinese, stating he would discuss this in greater details later in his testimony.
There have been previous suggestions that the PIC's investment into Independent Media was high risk.
However, Sekunjalo had reiterated that prior to the investments, the company already begun a transformation strategy. It said in a statement: "The Sekunjalo Group inherited the former Irish-owned company that had onerous long-term contracts in printing, distribution and other areas, had made no investment in digital technology and had invested nothing in the development and growth of the staff at Independent Media.
“Sekunjalo implemented a strategy to reposition Independent Media into a digital-first, print-best organisation and in so doing, into a larger ecosystem of technology media. This strategy and subsequent investments were implemented by Sekunjalo without any investment by the PIC or other shareholders. "
BUSINESS REPORT ONLINE