South Africa


R1.8bn Unemployment Insurance Fund monies lost in PIC’s Zweli Mkhize-linked Bounty Brands bet

R1.8bn Unemployment Insurance Fund monies lost in PIC’s Zweli Mkhize-linked Bounty Brands bet
Illustrative image | Sources: (Clockwise) Former PIC board member Sibusisiwe Zulu (Photo: Gallo Images / Phill Magakoe) | Former health minister Zweli Mkhize. (Photo: Gallo Images / Darren Stewart / Waldo Swiegers) | Peter Spinks, Bounty Brands CFO. (Photo: Supplied) | Businessman Lawrence Mulaudzi. (Photo: Supplied) | Stefan Rabe, Bounty Brands CEO. (Photo: Supplied)

Former ANC treasurer-general Zweli Mkhize’s trust scored an upmarket property thanks to a R1.37-billion Public Investment Corporation deal. It turns out the Unemployment Insurance Fund, which supplied the funding, has lost a staggering R1.8-billion thanks to this transaction and an earlier deal featuring businessman Lawrence Mulaudzi.

The Unemployment Insurance Fund (UIF) has lost an eye-watering R1.8-billion thanks to questionable investments involving consumer goods business Bounty Brands and politically connected dealmaker Lawrence Mulaudzi.

The deals were facilitated by the Public Investment Corporation (PIC), the UIF’s investment manager. 

Scorpio revealed on Monday that one of Mulaudzi’s companies had scored a R47.5-million “advisory” fee off a R1.37-billion UIF investment in Bright Glacier Trading.

Exposed: Zweli Mkhize’s R6m ‘cut’ from PIC’s R1.4bn deal using Unemployment Insurance Fund money

One day after this windfall, Mulaudzi’s company paid R5.9-million to transfer attorneys for an upmarket townhouse acquired by Dr Zweli Mkhize’s ZLM trust.

Shockingly, the R1.37-billion UIF investment, along with an earlier one of R406-million in one of Mulaudzi’s entities, Kefolile Consumer Brands, have both effectively been wiped out, according to the UIF’s latest annual report.

In the R1.37-billion deal, concluded in 2018, the PIC used the UIF funds to buy a 40% stake in Bright Glacier Trading, which in turn bought shares in the holding company of Bounty Brands.

Mulaudzi acted as a dealmaker or “adviser” in this transaction.  

Bounty Brands owns and distributes an array of consumer goods products, ranging from Vans and Diesel clothing to Cheerios cereal and Tuffy kitchen and home-care items.


Stefan Rabe, CEO of Bounty Brands. (Photo: Supplied)

The group recently announced that it had also acquired the sole distribution rights for Reebok in South Africa and other countries in the region. 

Sadly, as things stand, the UIF won’t benefit much from this and other Bounty Brands moves.

No bounty 

According to the UIF’s 2019/20 annual report, it had suffered impairment losses on the Bright Glacier investment totalling R549-million in 2019 and R822-million in the previous financial year. 

In other words, the UIF has lost the entire R1.37-billion investment. 

The problem lay with Bounty Brands, according to the annual report. 

Bright Glacier Trading’s investment in Bounty Brands “represents almost 100% of the company’s total assets”.

Bright Glacier and the UIF’s misfortunes, therefore, stemmed from huge troubles at the consumer goods group. 

Both Bright Glacier Trading and Bounty Brands were “going concern risks”, stated the annual report. 

The UIF’s indirect investment in Bounty Brands via Mulaudzi’s Kefolile Consumer Brands has also brought about financial misery.

The PIC in 2016 diverted R406-million in UIF monies to Kefolile in exchange for a 50% stake in Mulaudzi’s business. 

Kefolile used this money for a stake of roughly 9% in Bounty Brands. 

The carrying value for this investment is now down to a measly R2.7-million, according to the UIF’s annual report, meaning the UIF has lost more than R400-million. 

Like Bright Glacier Trading, Kefolile’s fortunes were largely dependent on those of Bounty Brands, seeing as Kefolile’s stake in the business “represents over 95% of the company’s total assets”, according to the annual report.

As a result of the problems at Bounty Brands, the UIF has therefore suffered losses totalling R1.77-billion thanks to the PIC’s decision to invest UIF cash in Kefolile and Bright Glacier Trading. 

In light of the UIF’s huge losses, we asked Mulaudzi and Mkhize about their respective windfalls from these transactions, but they did not reply.

As stated, the available information was contained in the UIF’s 2019/20 annual report. 

Scorpio wanted to establish whether there had perhaps been any improvement in the UIF’s investments in the subsequent financial year, but the 2020/21 annual report has been delayed. 

“At this stage the Fund is unable to provide the up-to-date financial accounts because our financials are subjected to an audit,” stated the UIF. 

It added: “The Fund does have a firm understanding of the issue with Kefolile Consumer Brands and Bright Glacier Trading and subsequent interventions undertaken to restore their financial position.”

It sounded like the UIF was considering its legal options.

“The Fund can only implement remedial action in accordance with the terms and conditions of the legal agreements entered into with these two companies, and that is being done.”

Scorpio asked the PIC for a simple explanation as to why its decision to invest UIF monies in the two businesses had gone so horribly wrong. 

Its response wasn’t very helpful. 

“There is a court process by investors relating to Bounty Brands which the PIC is not party to and cannot comment on. The current value of the UIF’s stake in Kefolile Consumer Brands will be disclosed to and by the client at financial year-end as usual,” said the PIC. 

Scorpio also sought answers from Bounty Brands’ principals, CEO Stefan Rabe and CFO Peter Spinks, and from Bright Glacier Trading’s managing director, Dr Lynette Moretlo Molefi. 

They all said they were unable to comment on the UIF’s losses. 

“As you are well aware, this matter is in the courts at this point. Thus I am unable to make any comments,” stated Molefi. 

“The below matter is still before the courts and I am unfortunately unable to comment,” said Rabe. 


Dr Moretlo Molefi, Bright Glacier Trading’s managing director. (Photo: Supplied)

The civil matter was instituted by Bright Glacier Trading and Kefolile Consumer Brands against Bounty Brands and its principals. 

The case largely revolves around a restructuring process Bounty Brands embarked on in 2020 in the face of huge debts and other problems. 

According to the court records, Bounty Brands decided to rope in yet more funders in exchange for new equity in the group. 

This severely diluted the shares of existing shareholders like Bright Glacier Trading and Kefolile Consumer Brands. 

As a result, the value of the UIF’s indirect stake in Bounty Brands had effectively been wiped out.

Scorpio is currently working through more than 600 pages of court records filed in the ongoing matter. 

We will publish further reports on this issue in due course. DM


Comments - Please in order to comment.

  • Tim Price says:

    Even in 2018, prior to a whiff of Covid, this must have been a profoundly risky investment. Branded consumer goods sales have been in the doldrums for years. Look at Edgars. UIF funds should be in low risk investments. Not this kind of thing.

    • Charles Parr says:

      Unfortunately there is no such thing as a low risk pal when it comes to investments. With this type of investment there are only bloodsuckers, leeches and extremely foolish/crooked investment managers.

    • Nick Jacobs says:

      This was also my first reaction. Are there not laws which stipulate that the public’s money must be invested in AAA-equivalent instruments, usually some kind of sovereign debt?

      I’m guessing the answer is no?

  • Sarel Van Der Walt says:

    Bounty Brands sounds like a 21st century Ponzi scheme (or SAA) where more & more capital injections are required every year to cover the continued losses.

  • Lorinda Winter says:

    Thanks Pieter-Louis, however, no surprise.

  • Pieter Malan says:

    Good investigative journolist. Keep digging for the truth DM. It’s s in there somewhere. Smoke and Mirrors must not stop you.

  • jcdville stormers says:

    The skullduggery just doesn’t stop,only in mzansi anything is possible in SA.Brilliant reporting

  • Ian Gwilt says:

    who on earth, with any financial acumen would have sanctioned investing monies in this scheme
    Only someone with a vested interest
    Add this to the other unbelievable investments that have fallen out of the PIC
    in a parallel universe , the specialised crimes team would be over this like a rash
    Here , the miscreants will be toasting with Crystal champagne and looking for the next scam
    Interesting to discover where the cash investment went
    Whilst mindboggling it will disappear off the radar as F*** All will happen

  • Johan Buys says:

    What did Rabe say about the state of the companies?

    Was the roughly 2 billion cash into group or buying people out?

    No doubt : blame it on Covid or Van Riebeeck or both

  • Chris 123 says:

    Sounds like a scam from the outset. How dare the PIC p*** away employees’ hard earned money on schemes like this, along with Serve’s “Independent” Newspapers. Looks like the PIC was an ANC’s top cadres piggy bank.

  • Craig B says:

    It’s like the PIC investment in Independent news ……… the money dissapears then the shares are mangled around.

  • A Z says:

    Right. And in allied news, let’s not forget and let’s see proof that Finance Minister Godongwana and his wife actually did repay to the clothing workers’ pension fund the R120 million he purloined to play around with through their investment vehicle Canyon Springs.

  • Carsten Rasch says:

    As usual with these so-called businessmen, it’s just about the political connections & the fixing fee. That money wasn’t even the UIF or PIC’s money, but contributions by workers kept in trust. The gall of the disgraceful Mkhize who now wants to run for president! Imagine that not-so-sharp crook in charge of the country …

  • ANC must GO says:

    Declare them Delinquent Directors. Just like Dudu

  • Laurence Erasmus says:

    No doubt officials at both UIF and PIC responsible for facilitating and authorising these investments must be investigated! Were they incentivised to authorise what now appears to be nothing more than a scheme to loot funds?

  • Ludovici DIVES says:

    Well done Mr. Myburgh. Follow the money……..

  • Craig A says:

    Why isn’t SARS looking into the unpaid taxes on this money? If Mkize got R 6m, then it should have been declared. He owes the taxman R 2,7m!
    Never mind the rest of the spoils.

  • Angus Auchterlonie says:

    Just one question. Why are these people and their associated “enablers” not in jail?

    • virginia crawford says:

      That is the question! Where is the Asset Forfeiture Unit? I do hope people think about this at the next election: looting at this rate will bankrupt the country and all the stolen millions will be hidden offshore – what an atrocious crime. We are all the victims.

  • Jean-Paul Kloppers says:

    I’m surprised public sector unions don’t have more to say about the PIC playing fast and loose with member monies.

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