Gill Marcus, Justice Lex Mpati and Emmanuel Lediga at the PIC Commission of Inquiry. Photo: Jacques Naude/African News Agency (ANA)
Gill Marcus, Justice Lex Mpati and Emmanuel Lediga at the PIC Commission of Inquiry. Photo: Jacques Naude/African News Agency (ANA)

#PICInquiry: The plot thickens

By Adri Senekal de Wet Time of article published Mar 25, 2019

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CAPE TOWN – All eyes will be on the Mpati Commission of Inquiry this week, which was appointed by President Cyril Ramaphosa in October 2018 to look into allegations of impropriety regarding the Public Investment Corporation (PIC).

Judge Lex Mpati is assisted by Gill Marcus, former governor of the SA Reserve Bank and a board member of Glencore, and Emmanuel Lediga, founder of Legae Securities. Lediga has experience in equities research and trading, bonds, money-market, private client services (including portfolio management), hedge funds, corporate finance, capital raising and black empowerment initiatives.

The commission is mandated to look into whether a director or employee of the PIC misused their position for personal gain; whether legislation or policies regarding the protection of whistle-blowers reporting corrupt activities were complied with; and whether discriminatory practices were followed with regard to the remuneration and performance awards of PIC employees. It has a mandate to examine and make recommendations on governance, structure of the PIC and any other matter that it deems warrants attention.

The commission is tasked to consider the period between January 2015 and August 2018. The President gave the commission a deadline to submit an interim report by February 15, 2019, and to submit a final report to the President on April 15, 2019.

The terms of reference state clearly that "the commission must inquire into, make findings, report on and make recommendations on: Whether there was any alleged impropriety regarding investment decisions; whether any findings of impropriety following the investigation resulted from ineffective governance and/or functioning by the PIC board; whether any PIC director or employee used his or her position or privileges or confidential information for personal gain or to improperly benefit another person; whether any legislation or PIC policies concerning the reporting of alleged corrupt activities and the protection of whistle-blowers were not complied with in respect of any alleged impropriety.

If this is indeed the mandate, some questions need to be asked:

Why has one group been singled out to demonstrate alleged irregularities at the PIC? Those, like me, who attended the Commission of Inquiry, should ask why are AYO, and Sagarmatha (the PIC didn’t invest a cent in Sagarmatha) being used as the example to prove alleged irregularities at the PIC?

Spokespersons of the PIC admitted last week that the inquiry is only about AYO. Deon Botha, head of corporate communications at the PIC, told me last week: “I want to suggest that we change the name to the “AYO, and Sagarmatha Inquiry”. He added: “When I and Sekgoela (PIC spokesperson reporting to Botha) drove in this morning, we said: 'Let’s go and listen to another AYO inquiry'."

The reality is that in almost all statements by those who have testified at the inquiry, they have referred to "media reports" regarding AYO. What specific media reports are these? Articles have been published by Tiso Blackstar, owners of Business Day, Sunday Times, Sowetan, and The Citizen, and competitors of Independent Media (owners of The Star, The Mercury, Pretoria News, Cape Times, the Cape Argus, Weekend Argus, Daily News, Sunday Independent, Sunday Tribune, Isolezwe, Business Report and Personal Finance), among others.

Is the "media" as powerful as that, that even a commission appointed by the President of the country should base allegations on irregularities written in often-biased and nearly always misleading reports?

Interesting is that "the media" have not reported much at all on Sunil Varghese’s statement that AYO was actually valued at R45.20 a share, and that “another valuation method used indicated a fair value of R47 a share”. Varghese is currently employed by the PIC as Portfolio Manager: Non-Consumer Industrials Listed Equities.

Business Report (BR) called for the investigation of other alleged corrupt transactions, including those that the current acting chief executive, Matshepo More (whom I have since learnt has been suspended), is implicated in (this is part of the commission's mandate as stated above). BR asked (in my column last week) about the PIC’s investments in Steinhoff, Lancaster, S&S Refinery, EOH, among others, where the PIC lost hundreds of billions of rand of pensioners’ money.

All who have testified so far came prepared: presenting statements mostly based on AYO, and Sagarmatha, pushing a narrative that there was some "wrong-doing" and using these companies as their scapegoat. Why? I have to ask again.

BR will continue reporting from the commission this week for a real look at the mandate set out by this inquiry. BR will also investigate the roles and mandates of regulators, such as CIPC, the FSCA and the JSE.


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