Dr Dan Matjila said it had occurred to him that all transactions that came under serious scrutiny were those that, in some way, involved black participants. Photo: Oupa Mokoena/African News Agency (ANA)
Dr Dan Matjila said it had occurred to him that all transactions that came under serious scrutiny were those that, in some way, involved black participants. Photo: Oupa Mokoena/African News Agency (ANA)

Dr Dan Matjila notes PIC Commission’s focus on black-owned businesses

By Sizwe Dlamini Time of article published Aug 16, 2019

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CAPE TOWN – As the Commission of Inquiry into alleged impropriety at the Public Investment Corporation (PIC) draws to a close this week, former chief executive Dr Dan Matjila urged it to dispel the perception that it exclusively looked at black-owned entities.

In his closing submission to the commission, Matjila said it had occurred to him that all transactions that came under serious scrutiny were those that involved black participants. 

“It may just be my perception but a very difficult one to dismiss in the, in view of the fact that we dealt with many mainly white-owned companies,” he said.

The companies that came under serious scrutiny include, among others, AYO Technology Solutions, Sagarmatha Technologies, Harith General Partners, Lebashe Investment Group, Tosaco Energy, Erin Energy, SNS Refineries, Mobile Specialised Technologies and Lancaster Group.

Lancaster owner Jayendra Naidoo was afforded a "cameo appearance" towards the end to share how the asset manager funded his transaction, largely described as a one-man show.

Lancaster only comprised of Naidoo at the time the company approached the PIC for R10.4bn. PIC senior market risk analyst Tshifhango Ndadza told the Judge Lex Mpati-led commission that the Lancaster transaction, dubbed Project Sierra, was not broad-based or major. “One individual exposed the PIC to a significant amount of risk,” he said.

In Project Sierra, the PIC provided a R9.4bn loan for the acquisition of 2.75 percent equity stake in Steinhoff. Within a year, Steinhoff share price began to decline, costing the PIC almost R6bn.

Matjila questioned the role played by Steinhoff International’s auditors in the alleged fraud. He said all asset managers, including the PIC, were “duped” by Steinhoff and that the group’s auditors should shoulder the blame for not picking up the financial irregularities. 

We are yet to hear Steinhoff executives’ submission to the PIC.

For the better part of the duration of the commission AYO, Sagarmatha, Harith and Lebashe came under the most scrutiny, which was, by the PIC's own admission, based on media reports. These companies availed their top executives to voluntarily appear to state their case and dispel inaccuracies peddled by various, mainly white-controlled media.

Claims against Harith and Lebashe were refuted after UDM leader General Bantu Holomisa failed to provide evidence supporting his allegations, placing the burden of proof squarely on the commission.

The PIC never invested in Sagarmatha.

On Monday, Matjila described the PIC’s investment in AYO as a long-term investment that would change the landscape in the information and communication technology (ICT) sector. He said the impression that the PIC lost money in the transaction was off the mark.

He said the PIC’s 29 percent stake in AYO was very well-designed because it gave the asset manager a fair amount of control in the running of the tech firm, allowing it to put in place new governance processes, in order to be able to protect its investment and spend the money efficiently.

Matjila chastised the asset manager's attempt to try and recover its investment in the AYO listing, describing the move as a suboptimal approach. "I mean unless the law has been broken somewhere and the JSE has not done its work in approving the PLS (pre-listing statement), the basis of which an investment was made,” Matjila said.

In March, a North Gauteng High ruling set aside a compliance notice against the PIC by the Companies and Intellectual Property Commission to recover R4.3bn from AYO. Thereafter, AYO announced its intention to sue the PIC and other entities for damages.

Matjila grew the PIC from R308bn outfit in 2003 to more than R2 trillion in 2018, making the company Africa’s largest asset manager. 

Matjila said new funding opportunities were made available to a diverse group of black entrepreneurs through the Isibaya Fund when all they received from commercial banks was rejection.

“I am proud that during this time, the PIC advanced loans to several hundred SMEs and tens and thousands of students. I am chuffed that we have supported the emergence of black asset managers, black stockbroking firms, black advisory firms and sensible black entrepreneurs, especially with the opportunities opening for black women,” he said.

PIC-appointed AYO chairperson Advocate Wallace Mgoqi applauded Matjila on his clear, concise and unbending testimony that reflected a well-rounded view of the AYO transaction in as much as, AYO is in fact a viable and long-term investment.

AYO’s share price had come under threat, Mgoqi said, as a result of negatively slanted, false and misinformed reporting. This was corroborated by Matjila.

Mgoqi called on the market to allow the company to focus on its day-to-day business, unlocking its investment pipeline and growth, and in realising the transformation of the ICT sector.


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