Public Investment Corporation (PIC) chief executive Abel Sithole has denied that the fund manager has been prejudiced against some of its investee companies.
This follows allegations by businessmen Iqbal Survé and Kholofelo Maponya that the financial and reputational damages suffered by the various companies owned by the pair can be attributed to the actions of the PIC.
Survé and Maponya appeared separately before Parliament’s Standing Committee on Finance on Wednesday, where they requested that the committee intervene in long-standing disputes involving their companies and the PIC.
Maponya is the head of Matome Maponya Investments (MMI) and made a slew of allegations against the PIC including accusing it of orchestrating a hostile takeover of Daybreak Farms (which has been wholly owned by the PIC since 2015) by organising a shareholders’ meeting to remove Maponya and two other directors of MMI, which previously owned Daybreak.
Survé, chair of Sekunjalo Investment Holdings (SIH) and executive chair of Independent Media, has accused the PIC of acting to “destroy” JSE-listed Ayo Technology through “agenda-driven and targeted” engagements. These engagements, according to Survé, have had a devastating financial and operational impact on the technology company.
Independent Media publishes titles such as Pretoria News and The Star newspaper. According to the Audit Bureau of Circulations’ data for the fourth quarter of 2020, circulation for Pretoria News is down 80% since 2019 – selling just 1 900 copies daily.
Ayo is one of the five companies in the Sekunjalo Group that Survé chaired that were investigated by the PIC commission for dodgy dealings with the fund manager. The Judicial Commission of Inquiry into the allegations of impropriety at the PIC found that the corporation’s R4.3 billion investment in Ayo in 2017 was littered with irregularities.
The PIC and the Government Employees Pension Fund (GEPF) have since approached the courts to have the transaction declared unlawful and set aside.
Sithole said: “We have no agenda against our investee companies [and] the fact that we invested in them indicates that we support the initial vision as presented.… If we have taken any action, it can’t be any action that would destroy the value in the investment that we made.
“It’s either the terms and conditions that were agreed when the investments were made that had not been adhered to and we are taking the action that we are taking to defend and try to secure the investments that we made.”
In 2017, the PIC subscribed to 99.8 million shares in Ayo at a price of R4.3 billion, or R43 per share prior to its listing on the JSE. This amount was grossly overvalued as there was no proper valuation conducted on the investment, according to the Mpati Commission.
“At the listing date, the shares were R43 per share, while as at 23 October 2019 the share price was R5.60 per share, a decrease in value per share of 87%,” the commission found.
Despite the value destruction of the Ayo share price, the company maintains that it has done “nothing wrong” and has blamed the media and the PIC for its losses, adding that the company is a “target of a coordinated smear campaign with ominous intentions”.
Arguments fail to convince
Members of the committee were however unconvinced by Survé and Maponya’s arguments.
ANC MP Phoebe Abraham bemoaned Maponya’s lack of detail when presenting his arguments, while DA MP Geordin Hill-Lewis described Survé arguments as “conspiracy theories” which cannot be backed by evidence.
“The reason why your companies are failing [and] why readers are leaving you and why this once proud media company is now just a smoking wreck of its former self … is because you [Survé] have no integrity and people can see that,” he said.
Freedom Front Plus MP Wouter Wessels echoed similar sentiments to Hill-Lewis, saying Survé did not address the adverse findings that were made by the Mpati Commission regarding his companies’ dealings with the PIC.
Committee chair Joseph Maswanganyi said the committee will reconvene at a later date to give the PIC an opportunity to fully respond to the allegations, some of which are before the courts.