Advocate Jannie Lubbe, the evidence leader at the PIC Commission of Inquiry. Photo: Oupa Mokoena/African News Agency (ANA)
Advocate Jannie Lubbe, the evidence leader at the PIC Commission of Inquiry. Photo: Oupa Mokoena/African News Agency (ANA)

#PICInquiry: Board never authorised $270m investment into Erin Energy

By Ayanda Mdluli Time of article published May 27, 2019

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PRETORIA – Advocate Jannie Lubbe, the evidence leader at the Commission of Inquiry into alleged improprieties at the Public Investment Corporation (PIC) on Monday told the commission that the PIC had confirmed that its investment committee and the board did not authorise the investment of $270 million (R3.9 billion) into Erin Energy.

The Johannesburg Stock Exchange’s General Manager, André Visser gave evidence at the PIC Commission of Inquiry into impropriety at the PIC, where he confirmed that a letter signed by Matjila, and the PIC’s head of fixed income, confirmed the investment. 

At the commission, Visser took the stand and testified that the Johannesburg Stock Exchange (JSE) is currently proposing changes to its listing requirements since the Erin Energy, Ayo Technology and Sagarmatha deals, involving the PIC, have come under the spotlight.  

Just last week, Ndivhuwo Tshikhudo, an investment analyst at the PIC who has an MBA from Texas USA, Bsc Mech Engineering and is a Chartered Financial Analyst, revealed to the commission that he was tasked with conducting an analysis of the investment and came up with recommendations for the PIC.

According to his testimony and statement, under oath, the PIC proceeded with the investment, even though it was highly recommended that the asset manager for the PIC not go ahead with the provision of the guarantee and to exit the Erin Energy equity investment. 

While testifying, Visser also revealed why the JSE had taken the decision to suspend Sagarmatha’s listing.

“Despite there being a lot of interest and noise regarding the company, the JSE made a decision based on the facts and the listing was declared invalid based on the exclusion of critical information,” he said.

However, two months ago, Dr Iqbal Survé the chairman of Sekunjalo, told the commission that the listing of Sagarmatha on the JSE was scuppered by various players acting in bad faith.

Survé was of the opinion that entities such as, the Companies Intellectual and Properties Commission (CIPC) - for reasons, which he believes were deceitful and were in bad faith - were part of the reason why the deal fell through. 

“The CIPC raised obstacles to the listing. This unseated foreign investors and the listing on the JSE was not pursued. Sagarmatha has applied to the South African Reserve Bank for authorisation for the listing to be done abroad,” he said.

Sagarmatha’s initial strategy was to raise between R3 billion and R7.5 billion through the JSE Listing, as a pre-cursor to a much more substantial capital raise on a foreign exchange. The amount raised in South Africa would be one of many funding rounds required to execute Sagarmatha’s vision.

Also, at the commission on Monday, Nicky Newton-King, the chief executive of the JSE says there's been a disastrous showing by corporate South Africa in the past few years, including transformation of the boards.


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