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Meet PEU Capital Partners

A closer look at the company behind Tshwane’s failed metering contract.

The people in charge of PEU Capital Partners, the company that has earned R830 million since October 2013 from the City of Tshwane’s failed metering contract, are not novices in business. On the contrary, they have been at leadership level at big, listed companies for many years.

The contract with Tshwane was terminated last week, but the termination terms have not been disclosed. The city maintains the terms have not been finalised and have denied allegations by the opposition DA that it has entered into terms that will cost the city a further R1.2 billion until July 2017.

Moneyweb did the following analysis:

PEU Capital Partners

The party the city contracted with in the so-called Master Service Agreement is PEU Capital Partners (Pty) Ltd. According to the Companies and Intellectual Property Commission (CIPC) database the directors of this company are Duarte Miguel de Quintal, Peter Malungani, PEU Group (Pty) Ltd, Busi Tshili and Thuli Zuma.

The most prominent of these are Malungani and Tshili. And before jumping to conclusions, Zuma is, according to a PEU spokesperson, not related to Number One. PEU further informed Moneyweb that Zuma resigned late last year.

According to the PEU website (which appears to be outdated in some respects), Malungani started his first business, Malungani & Associates, a financial advisory service serving small black-owned businesses, in 1984 at the age of 26 with an investment of R246.

Six months later he made his first acquisition – a plumbing business bought for R700 – and spent a further R400 on new equipment. He then expanded into general construction, according to information on the website.

PEU was incorporated in 1996 and participated in some of the most prominent empowerment deals around. These included acquiring stakes in Investec (8.6%), Super Group (25.1%) with which it had a long-standing relationship due to its 30% holding in Fleet Africa, Capital Alliance, Aspen, Tsogo Sun, Lazarus Motors, PPC and Dip Civils.

Malungani served as non-executive chair of Super Group from 2004 to 2009 and non-executive director of Investec Bank and Investec plc until last year and was deputy chairman of Capital Alliance until it merged with Liberty in 2005. He also previously served on the board of Business Against Crime and Transnet.

He is still the non-executive chairman of Phumelela Gaming and is a non-executive director of cement company PPC. He holds many other directorships of less prominent companies.

Busi Tshili is a chartered accountant and is listed as financial director on the PEU website. She was the PEU deponent in AfriSake’s pending court challenge on the contract with the City of Tshwane and seems to be in charge of the project from PEU’s side.

She is a former director of Investec Bank, Super Group, Capital Alliance Life, Fleet Africa and InspectaCar and still serves on the boards of, among others, Lazarus Motor Company and Dip Civils.

Thuli Zuma is listed on the PEU website as an investment banking executive who “has more than twelve years experience in investment banking and private equities having held various positions in a number of local entities, including the position of CEO at Worldwide African Investment Holdings”.

He is a chartered accountant and serves as director of Dip Civils, Argil Venture Capital and Asili Risk Management.

Duarte Miguel de Quintal is not listed on the PEU website, but serves on the boards of various PEU companies as well as Logicento Investments and is a former director of Super Group and Lazarus Motor Company.

PEU Group (Pty) Ltd

Malungani, Tshili and De Quintal are listed at the CIPC as directors of the PEU Group.

According to the company’s website, management and staff own 72% of the company, the Intsika Enablement Trust 20% and the Intsika Investment Club 8%. It is not clear when the information was published and whether the shareholding is still the same.

Total Utilities Management Services (Pty) Ltd

Abbreviated TUMS, this company was the vehicle for the implementation of the Tshwane smart prepaid metering contract.

Its directors are Malungani, Tshili, De Quintal as well as Anton Millar and Morestat Corporate Services.

Morestat provides secretarial and corporate services to companies, according to its website.

The CIPC database carries a long list of current and former directorships for Millar. This includes PEU Utilities Africa, Hlanganani Capital and APA Network Consultants.

According to the Hlanganani website Millar is the principal and owner of TSC Capital, “a private investment and advisory entity primarily focusing on arranging investments predominantly in mining services”.

He is a chartered accountant and former managing director of the Corporate and Investment Banking division at Absa Capital. Before that he was joint head of Specialised Finance for South Africa at Investec, according to the website.

His tenure at Investec overlapped with that of Tshili and Malungani.

On its website TSC Capital states its policy of taking at least 20% in any investment it arranges and lists TUMS as one of its investments, along with Cure Day Clinics, Hlanganani Capital, Medicare Hospital Equipment and Amalgamated Corrosion Engineering, among others.

Moneyweb has requested updated information from PEU with regard to the shareholding in the three companies discussed, but has not received anything so far. If any response is received, it will be published.

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Interesting.
Seems like they still don’t want to disclose info about shareholding in the three companies. Not surprising given the modus operandi…..

End of comments.

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