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PIC inquiry claims another scalp

Fidelis Madavo (Photo: Dangote Cement)

Amid numerous allegations of impropriety at the PIC, scalps are few and far between. But it would appear that there is action behind the scenes.

The Public Investment Corporation (PIC) has terminated the employment contract of its executive head of listed investments, Fidelis Madavo. 

Madavo and assistant portfolio manager Victor Seanie were suspended by the PIC board on 22 January 2019 on the basis of an internal probe into the corporation’s rushed R4.3-billion investment into AYO Technology Solutions ahead of its listing in December 2017.

Seanie was dismissed in October 2019 following a disciplinary hearing. At the time he claimed he was used by the asset manager as a “fall guy”. He noted that senior executives he reported to, including Madavo, had not faced similar sanction.

According to the PIC, the preliminary report into the AYO transaction indicated that governance and PIC approval processes had been disregarded when the transaction was concluded. 

“Upon receipt of the preliminary report, the PIC instituted a disciplinary process against Madavo, which was chaired by an independent Chairman, who is also a Senior Counsel. After representations from both the PIC and Madavo, the Chairman recommended that Madavo be relieved of his duties on the basis of gross misconduct,” a statement from the PIC said.

Internal disciplinary hearings relating to other implicated PIC officials are continuing. 

Action such as this, following numerous scandals, is rare.

Former PIC CEO Dan Matjila resigned in November 2018 amid allegations of impropriety. He has been the subject of an internal investigation into kickbacks and deals for friends, but to date, nothing has come of this.

The disastrous AYO transaction followed on the heels of the collapse of VBS Bank in early 2018, in which the PIC was heavily invested. The bank collapsed after being fleeced by its directors, senior executives and well-connected politicians. 

The PIC did not escape unscathed. In April 2018 its executive head of risk management, Paul Magula‚ was fired after being found guilty of poor performance, while its executive head for legal counsel‚ governance and compliance, Ernest Nesane‚ resigned.

Nesane and Magula were directors of VBS until the Limpopo-based mutual bank was placed under curatorship by the South African Reserve Bank.

A judicial commission of inquiry into allegations of corruption at the state-run asset manager was appointed in October 2018. 

The report was completed and handed to President Cyril Ramaphosa in late December 2019. 

He handed the report to the board in mid-February. To date, the report, with its recommendations has not been made public but it would appear that its recommendations are being implemented. BM

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