Questions to PIC about mystery investment in the Mogs Group
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LAST WEEK I mentioned that Business Report (BR) is investigating a loan by the Public Investment Corporation (PIC) into Sunrise Energy via the Mogs group.
The PIC’s loan to Mogs is more than R1 billion – indirectly to Sunrise Energy – this loan has not been serviced over a period of five years, according to sources.
Mr Sekgoela, PIC media spokesperson, told BR the loan was serviced, but could not provide any evidence by close of business yesterday “on how the loan was serviced”. Sources confirmed that this is not the case.
Sunrise Energy also received a loan from the Industrial Development Corporation (IDC) to the amount of R1bn in 2011.
BR queries why Sunrise Energy was not part of the Mpati Commission of Inquiry, even though it is questionable as to how the loan was acquired.
BR asked Sekgoela if the former chief finance officer of the PIC, Albertinah Kekana, arranged the loan to Sunrise (or Mogs) – while she was at the PIC. The PIC spokesperson denied this. It is, however, interesting that Kekana was appointed as the chief executive and chairperson of Mogs one year later.
The investigation concluded this week and what we discovered is interesting, to say the least.
As part of my investigation, I sent questions to Sekgoela asking if they were aware that Mogs is currently under criminal investigation by the Ghanaian authorities. We also asked the PIC to elaborate on whether the alleged investment was funded by way of debt or equity.
Sekgoela said: “The PIC acknowledges receipt of your query. The PIC, on behalf of the Government Employees Pension Fund (GEPF), is a 49 percent shareholder and is a lender in Mogs. The other 51 percent is owned Royal Bafokeng Holdings.
“The PIC is aware of the investigations instituted against Mogs by Ghanaian authorities. The PIC has been informed by Mogs that it (Mogs) reported allegations of fraud levelled against the former chief executive, Mr Errol Gregor, to the South African law enforcement authorities and that it commissioned a forensic investigation into these allegations.
“The outcomes of the forensic investigation are being implemented.”
On asking for a copy of the report, which had been submitted some time back, I was informed that it remained the property of Mogs and I should approach them.
Needless, to say, this reply was not satisfactory. I consequently wrote back pointing out that the funds in the care of the PIC have a public interest.
Shrouding them in secrecy is disturbing, highly irregular and not supported by existing legislation.
I also pointed out that as a member of the public serving an interest defined by the freedom of the press, I had a right to be provided with a copy of the report of the investigation relating to the PIC funding of Mogs.
Further, being that the investigation had been conducted by the PIC, Mogs does not have a proprietary ownership over the report.
Besides, nothing in this report is protected by the exclusionary provisions of sections 34 and 36 of the Promotion of Access to Information Act.
While I am aware that there is a Cabinet decision that states that singular acts of denial can expose individuals personally and not the PIC to litigation at their own cost, the questions remains as to why the PIC itself is unwilling to release this report…
Adri Senekal de Wet is the Editor in Chief of Business Report.
BUSINESS REPORT ONLINE