picThe Citizen reports that labour unions that received large stakes in Iqbal Survé-linked Ayo Technology Solutions through a discounted Broad-Based Black Economic Empowerment (B-BBEE) consortium deal tried to influence the Public Investment Corporation’s (PIC) decision to invest in another company connected to him.

This came to light at the judicial inquiry probing impropriety at the PIC last week. Recently-reinstated company secretary Bongani Mathebula testified that various political formations and unions had e-mailed the PIC lobbying it to invest in Survé’s Sagarmatha Technologies.

Mathebula said they received letters from the Police and Prisons Civil Rights Union’s (Popcru) investment arm, PGC, the Federation of Unions of South Africa (Fedusa) and Cosatu’s investment company, Kopano ke Matla.

Mathebula said Fedusa’s letter was signed by suspended secretary-general Dennis George, Cosatu’s letter by Kopano CEO Steven Thebedi and Popcru’s by PGC head Zwilenkosi Mdletshe. Survé also e-mailed an attachment of Cosatu’s letter to former PIC CEO Dan Matjila, Mathebula said. A statement was also received from the Economic Freedom Fighters.

Matjila facilitates union interference

She said that on the eve of the meeting of the investment committee, which was considering the transaction, Matjila asked her to forward these e-mails to the committee to show support for the investment in Sagarmatha.

A December 2017 Ayo shareholder circular indicated that over 30 million shares were issued to a B-BBEE consortium at R1.50 per share.

The PIC controversially invested R4.3 billion in Ayo when it listed on the JSE in December 2017 at R43 per share. This bought it a 29% stake, despite the investment team raising red flags about the company’s business merit and its high valuation.

Popcru and Fedusa were named as among the consortium members. According to Ayo’s share register, the unions are among the top shareholders, with Difeme Holdings Group, in which George is the sole director, listed twice. Popcru Group holds 1.8 million shares and Cosatu’s Kopano has two million shares.

The PIC’s investment team had reservations about investing in Sagarmatha, which asked for a R3 billion cash injection from the PIC at R39.62 a share.

PIC general manager for listed equities Lebogang Molebatsi and portfolio manager Sunil Varghase previously testified that Sagarmatha’s listing price was too high and recommended the PIC subscribe at R7.06.

Both Ayo and Sagarmatha are associates of the Sekunjalo group which is ultimately controlled by Survé via a family trust. While the PIC was still considering the Sagarmatha investment, the JSE suspended the company’s listing as it did not comply with certain requirements.

Mathebula told the commission she believed outside interference of this nature would shock those whose money the PIC was supposed to invest responsibly.

She added tha it would also dishearten individuals and businesses whose funding applications were rejected “for lack of political lobbying enabled by the [chief executive]”.

The PIC manages over R2 trillion in assets, most of which is from government pensions.

The original of this report by Tebogo Tshwane appeared on page 28 of The Citizen of 26 April 2019


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