PIC inquiry: R4.3bn Ayo deal approved in record 3 weeks

Suspended executive says it appears Ayo was dictating time frames to the PIC.
Seanie testified that despite his queries about the Ayo valuation, former CEO Dan Matjila signed the irrevocable subscription agreement, binding the PIC to buy Ayo shares in the controversial multi-billion-rand deal. Image: Moneyweb.

The PIC’s R4.3 billion Ayo Technology Solutions deal took centre stage at the inquiry on Wednesday, with recently suspended assistant portfolio manager Victor Seanie explaining to the commission how the transaction was pushed through without proper due diligence. 

Just last week, we learnt that Seanie and the PIC’s executive head of listed investments Fidelis Madavo had been suspended for “blatant flouting of governance and approval processes”.

Read: Ayo investment passed on by Matjila – suspended PIC exec

Much of the inquiry has revolved around understanding the process Africa’s biggest asset manager undertakes before making final investment decisions, with today’s testimony querying the definitive powers held by the CEO docket.

Seanie’s testimony was detailed. He revealed, for example, the exact day he first made contact with the Ayo team: “On 16 November 2017 at around 10:15, I was instructed by the executive head of listed investments [Madavo], through his personal assistant, to immediately attend an introductory meeting with Ayo.”

His testimony indicates that the Ayo deal was troubled from the beginning: “I requested Ayo’s pre-listing statement from [Abdul] Malick Salie [Ayo’s head of corporate finance and business development] via email on 17 November 2017 at 15:50,” said Seanie. “Mr Salie only emailed me Ayo’s pre-listing statement a week later on 24 November 2017 at 08:01.”

Despite this sluggish response, Ayo received an approval in record time by PIC standards. “The Ayo process was unusual in that it seemed to me Ayo was dictating time frames to the PIC,” said Seanie.


Time for approval

Estimated transaction

Vodacom Tanzania

11.7 weeks

R841 million

RH Bophelo

9.9 weeks

R400-500 million


11.7 weeks

R3-7.5 billion


3 weeks

(measured until December 15, 2017, the closing date of the Ayo private placement)

R4.3 billion

Seanie’s testimony contradicts the PIC’s motivation for firing him. He said he made an effort to query the deal by, for example, making a “professional judgement call to allocate team members [from the risk and legal departments] to assist on the Ayo IPO.”

This would later be cited as one of the reasons for his suspension, since he did not get approval from the portfolio management committee (PMC).

One has to wonder then: was the Ayo deal set to get approval without a due diligence report – and if it wasn’t, would Seanie’s sanctioning of due diligence activities be reason to suspend him?


An equally troubling revelation by Seanie is that Ayo dictated the listing share price. “When companies offer their shares in an IPO, it is normal for the company to negotiate the IPO share price based on the demand for its shares from mainly institutional investors,” said Seanie. “The PIC listed equities team was never engaged to negotiate an IPO price for Ayo.”

Despite the warning signs, former PIC CEO Dan Matjila signed the Ayo subscription agreement on December 14, 2017 – even though the portfolio monitoring committee (PMC) had not approved it. “I thought signing the subscription agreement was highly irregular because I had never seen it happen before and the PMC had not yet approved the Ayo transaction,” said Seanie.

Today’s testimony shed light on some good practices at the PIC, even though they were ignored in the case of the Ayo deal, such as ‘downside protection’ (basically a transaction involving the purchase of an option to hedge a long position).

Seanie’s testimony also shed light on past transactions such as the Vodacom Tanzania deal, where downside protection was put in place (understandable given the policy uncertainty in the Tanzanian market).

But his testimony reveals that despite the warnings around the Ayo deal, downside protection was only proposed by Matshepo More (then chief financial officer, now acting CEO) on December 20, 2017 – despite Matjila having signed the Ayo subscription agreement on December 14.

“I found this very strange and irregular because Ms More was aware that the irrevocable subscription agreement had already been signed on 14 December, and she had already signed the Ayo payment memo on 19 December,” said Seanie.

The inquiry resumes on February 25.



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This is fraud and worthy of criminal prosecution and sanctioning.

R4.3 billion. Whoever was involved; needs to spend time behind bars.

A poor chap that steals food from Shoprite is given jail time. These guys that invested R4.3 billion; without any consequences. This is wrong.

It’s obvious the PIC is run by amateurs or is as corrupt as hell or both. How many billions have they lost for the government employees pension fund through sweatheart deals like this? What will the consequences be? I predict nothing, nothing at all – except to worsen Iqbal Surve’s reputation even more and flush it down the toilet along with the Guptas and Watsons.

Helen’s tax revolt is looking good.

I suspect that it’s more of the CEO having too much power to bypass procedures if he wants to,rather than the whole team being amateurs.

jblack, I don’t necessarily disagree but on what basis do you make that statement? Have not seen them do much in the way of great work and they are not seen as very efficient by the market so if they are not efficient and they are doing bad deals then it’s feasible to say the bulk of the team are not very good or corrupt.

The search is on for: (1) the lost city of Atlantic (2) the guy who shot JFK (3) just 10 honest civil servants in this country.

10 optimistic. 5 more likely.

(1) Atlantis (not Atlantic) was clearly at the Straights of Gibraltar
(2) The CIA shot Kennedy. Blatantly obvious.
(3) Never going to happen

They was working for a Christmas bonus. Unfortunatley this is what happening in all parastatals. That the issue of turning over your money to someone else hoping they make sure you have a good return on it. At the end of the day you sit with nothing. Then people complain about low savings or investments because it seems its better you spend it all.

Theft from pensions funds in SA is rife. Between the PIC and the various Cosatu affiliated unions such as SACTWU and SACCAWU tens of billions have been lost. In many cases trustees of the funds are persuaded to make bad investments by people who stand to gain hugely by these investments. Dubious liquidation enquiries are held once the companies in whom the pension funds were invested inevitably fail. In the cases of Tollgate, Pinnacle Point Group there were NO consequences for the directors of these firms. They got off Scot Free. Money is invested by the unions, the companies buy assets with these funds and the directors acquire these assets post liquidation at rock bottom prices. It is nothing short of pure fraud in my eyes. Steinhoff is following close on the heels of these two liquidations. Up until recently the unions simply accepted the losses but my understanding is that they are re-opening the investigations in a criminal forum. About time !!!

Dr Dan should do the correct thing. Hara Kiri

The ANC will steal your taxes, Pension funds, Property (EWC). There is no end to the evil that is the ANC

I heard rumours that Dr. Dan is still influencing deals inside the PIC, despite being suspended.

I also can’t understand how the Acting CEO, More, is still there, despite being heavily implicated?

It beggars belief…

In Africa the unbelievable happens every day. Even the Romans had a saying : Ex Africa aliquid semper novi. Africa never ceased to amaze them and it continues to this day.

“Out of Africa always something new”. Clarity when giving a foreign text is essential.

Again we will see nothing to happen or will happen only in the future many, many years to come and by that stage nothing will be executed

Nice expose – please copy Ms Shamila Batohi for comment. She’ll be in her new office tomorrow. Just in time.

These days one just has to look at the amount of upmarket cars on the road, and the calibre of person driving most of them to know that the system in SA is being run by corrupt, incompetent people with no value-add whatsoever. This is the downfall of SA!! An Australian visitor asked me if luxury cars were cheap here, and/or were houses very cheap, because he figured that a lot of people were driving cars valued at a large percentage of the value of their primary residence. The signs of corruption are all over, funny how SARS cannot see where to start!! Harare Ferrari’s!

AND, the skeletons are tumbling out of the closet!

Having dealt with the good Dr Surve on multiple occasions (Mandela’s personal physician …cough), lets just say that I always checked to see if my wallet and cellphone were still in my pocket afterwards. A hot shower was also immediately required

have an upvote for making my sour countenance break into a smile. A rare occurence these days to be sure.

My work here is done

Not surprised, the PIC has been a mix of a good training ground for some young guys coming into asset management and the ANC’s political slush fund for a long time. The mandate to take care of gov money went out the window decades ago.

I think you could have an inquiry for 95% of SOEs and munics and we would find out just how atrocious the ANC really are at doing anything about corruption.

End of comments.




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