Paul Magula before the commission of inquiry into allegations of impropriety regarding the public investment corporation held in Pretoria. Photo: Thobile Mathonsi/African News Agency(ANA)

PRETORIA – Acting executive head of risk and compliance at the Public Investment Corporation (PIC), Candace Abrahams, said on Tuesday that the final “recommended” sign-off of the Risk Report considerations were signed-off by the Executive Head.

Abrahams was presenting her testimony before the PIC Commission of inquiry, where she said: “Regarding the AYO Technologies investment, my role in the investment consideration was to review the risk report that was compiled by Tshifhango Ndadza (Senior Market Risk Analyst) and the Busisiwe Mazibuko (Graduate).” 

Abrahams statement:

The final ‘recommended’ sign-off of the Risk Report considerations were signed-off by the Executive Head himself, at the time being Mr Magula. 

l was not involved in any formal due diligence-related work regarding this transaction, nor did my Executive Head discuss any pertinent risk considerations that he would have expected to be ventilated in the report. This would have been done between the Executive Head the credit risk team members involved in the DD themselves. To my mind, this was the normal practice followed in as far as my involvement went. Therefore I did not view this as out of the ordinary at the time when I was requested to review and sign-off as 'reviewer’ after the final compilation of the Risk Report. 

I received the Risk Report on or about the 14 December 2017 to review and the risk report was signed-off on the 15 December 2017, including sign-off by the Executive Head. 

At the time that the Risk Report was signed off, it did not strike me that Tshifhango Ndadza who had also primarily participated in the compilation of the final Risk Report had not included his name and his signature to the report. Upon reflection, this is not the norm, as the analyst is generally the compiler of his or her Risk Report and would sign-off on this basis. Further to this. the compiler is also the person to present and speak to the detail of his or her report when representation is made to a Committee. My understanding also is that Tshifhango Ndadza, being the senior of the two co-compilers and not Busisiwe Mazibuko, had presented the report to the PMC-Ll Committee on 20 December 2017. It is also my understanding that my Executive Head was not present at that meeting of the 20 December 2017, requiring a staff member in the department to Act in his capacity for this meeting. 

I had applied for annual leave from the 20 December 2017 until 04 January 2018 (both days inclusive) … and was thus not present or on duty on the day that the PMC-Ll meeting was called to consider the investment transaction in AYO Technologies. 

At the time of sign-off of the Risk Report on or about 15 December 2017, I was not privy to nor aware of the following, which has since come to light: 

  1. That the irrevocable undertaking or subscription agreement had been signed prior to the meeting of 20 December 2017; and 
  2. That the disbursement memo was signed prior to the meeting of 20 December 2017. 

Regarding disbursement processes, I have an understanding of the disbursement process for the Unlisted Investments portfolio since Acting in the role of the EH: Risk and Compliance from 06 March 2018. In this process, the EH: Risk and Compliance is a signatory to the internal disbursement process. 

To date, I have never been involved in the internal disbursement process for transactions in the Listed Portfolio and therefore have no knowledge of nor would have been in receipt of any documentation for disbursement sign-off for the AYO Technologies transaction. 

I also hereby state that even during the time of PIC preparing its report and presentation to the Standing Committee on Public Accounts (SCOPA), which took place on 06 December 2018, that l was not aware of issues highlighted in above in relation to AYO Technologies. 

This information only came to my attention through the Internal Audit investigation conducted in December 2018, after the presentation to SCOPA in relation to the irrevocable subscription.

I became aware of these issues, and the actual investigation itself on the 12 December 2018 wherein l was instructed via email the day before, on 11 December 2018, by the Executive Head: Human Resources to make myself available for an interview with Internal Audit. The Head of Internal Audit and the Acting CEO were copied on this email to me.