CAPE TOWN - I was pleasantly surprised when Finance Minister Tito Mboweni appointed veteran businessperson Dr Reuel Khoza as the interim chairperson of the Public Investment Corporation (PIC) earlier this year.
Khoza boasts an impressive track record of leadership positions in South Africa’s private and public sectors.
He has previously served as board chairperson at the Nedbank Group, Globeleq, and GlaxoSmithKline, among others.
Khoza has held directorships at the JSE, IBM South Africa, the Liberty Life Group, the Standard Bank Group, Nampak as well as Old Mutual, and was formerly the president of the Institute of Directors in South Africa.
He is also currently the chairperson of black-owned investment holding company Dzana Investments and AKA Capital, a private equity and investment holding company, according to his website.
Khoza also played a role in developing the King Codes, which govern corporate governance, serving as Mervyn King’s deputy in the formulation of the King III and King IV Codes.
This astute businessman describes himself as a thought leader, an Africanist, a public speaker and a lyricist.
I wish Khoza all the best as he takes on the rather daunting task of steering the PIC vessel in the right direction and to restore confidence in the asset manager.
Having said that, one cannot ignore the move by the PIC to apply for the liquidation application against Sekunjalo Independent Media (SIM), which I feel is an assault on media freedom and the transformation of South Africa’s media landscape.
I fully agree with the various politicians, business leaders and labour organisations who have publicly stated their concerns on the PIC’s move.
There is more to this liquidation application than meets the eye.
As ANC secretary-general Ace Magashule recently pointed out, one of the principles that always needs to be held sacrosanct is freedom of speech.
“This is best described by what Evelyn Beatrice Hall wrote in The Friends of Voltaire: ‘I disapprove of what you say, but I will defend to the death your right to say it.’
“This means that I may not like what you say, but I am obliged to hear you out.
“I have watched with increasing alarm the events unfolding with regards to (SIM) and the PIC,” he said.
“Try as I may, I cannot interpret the extraordinary - almost exclusive - concentration of the PIC on SIM as quirky behaviour or a coincidence.
“As secretary-general of the ANC, to whom our members and supporters come with their concerns, I have several times had to face the genuine questions coming from worried comrades.
“They are concerned that there is much more here than meets the eye and that SIM is being singled out, not because of financial irregularities, or specifically its alleged breach of contractual commitments to the PIC, but because of the independent positions and reporting of its newspapers and the very influential Independent Online (IOL).
“If concern about financial irregularities was indeed the driving force, why is so little effort going into the massive fraud committed by Steinhoff with PIC funds, which led to astronomical losses for the PIC?” said Magashule.
ANC deputy secretary-general Jessie Duarte said other than appealing to the sensitivities of media ownership in South Africa, there is, however, another aspect of concern to the current proposed action the PIC wishes to take against the Sekunjalo Group.
“This is the question of fairness. To reduce these two important issues, diversity in media ownership and fairness, to a particular person is not helpful, nor is it progressive.
“We must ask whether the PIC has taken similar action against other companies in which it has invested heavily in the past, where shareholder value plummeted,” said Duarte.
The public at large is by now fully aware of the billions that the PIC lost by investing in loss-making public companies, with the likes of Steinhoff, EOH, Edcon, Tongaat, MTN Nigeria. Shocking is that most of these companies are accused of fraudulent transactions.
Now, why does the PIC only apply for the liquidation of Sekunjalo-related companies?
At no point were any of these companies involved in any fraudulent transactions whatsoever.
There are a number of investments made by the PIC that have gone under, but we don’t see such brouhaha around those other losses.
Take Erin Energy for instance, which eventually filed for bankruptcy in 2018. The asset manager lost about $333 million (R4.86 billion - at the current exchange rate) on the Erin Energy investment - $270m in the initial investment and an additional $67m it had to pay on Erin Energy’s behalf to the guarantor of a $100m loan from Mauritius Commercial Bank, the inquiry heard.
The PIC also suffered a R1.8bn whammy after it bought Cyril Ramaphosa’s company out of MTN Nigeria.
I received various messages from several business leaders over the last couple of days, asking me to follow up on, as they call it, ‘the witch hunt’ against SIM and related companies.
I will gladly share these with you, Dr Khoza, in person.
My thoughts are: Where is the legal action and liquidation of Steinhoff since the widely reported collapse and accounting irregularities exposed by the PIC report?
Where is their legal action and liquidation of companies that have collapsed over 60 percent share value due to reported fraud and irregularities, ie Tongaat et al?
Where is the list of all the companies with debt against the PIC - and are they all servicing the debt?
Are those who are not servicing the debt also facing legal action?
Sekunjalo-related companies are alive and keeping thousands of people employed, yet somehow they are the ones targeted to be brought to their knees by the asset manager, which is tasked with, among other things, promoting transformation.
The natural course of action that an investor would take is to put mechanisms in place to save the investment - especially during such times where unemployment in South Africa is at its worst - rather than go all out to destroy it.
Hence I have high hopes that Khoza, an astute businessman, thought leader, and Africanist, will rise to the occasion and apply his wealth of experience to champion the transformation drive, save people’s jobs, and ultimately save the asset manager’s valuable investment.