Public Investment Corporation (PIC) inquiry chairperson Lex Mpati has repeatedly called for anyone with information about impropriety at the PIC to come forward. On Wednesday, assistant portfolio manager Victor Seanie did just that, barely a week after he was suspended from the asset manager.
In his explosive testimony, Seanie said former CEO Dan Matjila’s alleged friendship with controversial businessman Iqbal Survé may have led to some of the PIC’s most controversial investment decisions in recent years as executives have ignored advice from staff and gambled with government employee pensions.
Surve’s Ayo Technology Solutions, the PIC and Matjila have repeatedly denied wrongdoing. Matjila plans to offer his version of events in front of the inquiry.
The PIC inquiry, sitting for its sixth day of public hearings in Pretoria, was established to investigate impropriety regarding investment decisions and whether employees and directors have used their positions for self-gain.
The inquiry has largely focused on the PIC’s December 2017 decision to invest R4.3-billion in Ayo Technology Solutions, which has widely been criticised as a poor deal.
Seanie, an assistant portfolio manager in non-consumer industrials at the PIC, said he worked closely on the Ayo deal as well as Survé’s attempt to get up to R7.5-billion in PIC backing for the listing of Sagarmatha, which eventually failed.
While Seanie researched the proposed investments and compiled reports for decision-making, he said PIC executives ignored his advice against investing in Ayo and Sagarmatha and dictated report summaries and recommendations.
He claims to have been told by his bosses “the report on Ayo that’s written and eventually submitted to the [portfolio management committee] should be a favourable one”.
He said he advised against investing in Ayo but executives and Matjila, in particular, seemed determined to push through the deal.
“The Ayo process was unusual in that it seemed to me that Ayo was dictating timeframes to the PIC. I found this strange and untoward,” claimed Seanie.
Ayo wouldn’t allow the PIC to negotiate its requested R43 per share, which the R2-trillion asset manager would normally do. Ayo leaders appeared to know the deal was going through before it did and it was eventually signed with insufficient due diligence and without the portfolio management committee’s approval, Seanie claimed.
“The Ayo transaction was a foregone conclusion,” he Seanie.
He speculated it was because Survé and “Dr Dan” – Matjila, who resigned in November – were friends.
Seanie alleged Survé said in a meeting: “I consider Dr Dan a good friend.”
Seanie said it appeared Matjila wanted to help Survé raise funds to cover the R1-billion the PIC invested in Survé’s Independent Media.
He called it “a bailout”.
“It seems to be that there’s that relationship between Dr Iqbal Survé and Dr Daniel Matjila whereby Dr Dan always takes a favourable view and is willing to help Iqbal Survé from the PIC in order to do deals, in order to raise money,” said Seanie.
“One version, which is a plausible version, is that Iqbal Survé has this big loan, I think in excess of R1-billion that he owes to the PIC and he’s struggling to pay it because it’s underpinned by a loss-making business and he is trying to find ways to get money out of the PIC and inventing and coming up with different business ideas to do that.”
Learning from the poor Ayo investment, Seanie said his team was not willing to let PIC executives override their analysis and invest between R3-billion and R7.5-billion in Sagarmatha, again closely linked to Survé.
Sagarmatha wanted R39 per share but Seanie recommended offering R7 in the hope of derailing the deal. His real estimate was that the shares were worth R4 each. He said executives wanted to push ahead with Sagarmatha at its asking price until his team raised a potential regulation violation.
Seanie broke down the ownership of the various entities linked to Survé. He said Ayo is 49% owned by Africa Equity Empowerment Investments (AEEI), which is 69% owned by Sekunjalo Investment Holdings. Sagarmatha is 96% owned by Sekunjalo.
Sekunjalo is 100% owned by a trust whose trustee is Iqbal Survé and beneficiaries are his children, according to Seanie.
Seanie was suspended last week, along with the executive head of listed investments Fidelis Madavo after the PIC board received a provisional report on the Ayo investment. Seanie named Madavo as one of the executives who pushed through the poor investments but said he was “very shocked” by his own suspension.
“This was very unexpected as I am a very small player in the bigger scheme of things at the PIC and in respect of the Ayo transaction. Following this, it became very important that I speak out as I realised there are forces that are working against me and this commission could be my only salvation to my good name and my professional integrity, both of which I’ve worked hard for,” said Seanie.
He also spoke of a toxic culture at the PIC: “I learnt that the PIC’s work culture is also one of intimidation, you don’t question, you comply, ostracism, fear, coercion and undermining the independent research views of investment professionals.”
Questions have been raised at the inquiry about the process the Ayo deal followed but PIC leaders have so far denied knowledge of impropriety.
The PIC was quoted before Wednesday’s hearings saying it was cautious not to discuss matters before the inquiry. Survé, Ayo and AEEI have repeatedly said the PIC deal was above board but have been reluctant to comment on the inquiry.
Survé has been approached for comment but was yet to respond.
Wednesday’s public hearing was the last for the week before they will resume from 25 to 27 February.
Chairperson Mpati said the adjournment was due to his prior engagements. The names of the next witnesses have not been released. DM