South Africa


The veteran, the doctor and the PIC’s dodgy R600m land deal

The veteran, the doctor and the PIC’s dodgy R600m land deal
From left: South African rand banknotes. (Photo: Simon Dawson / Bloomberg via Getty Images) | PIC logo. (Image: Supplied) | Adobe Stock

Extracting money from the Public Investment Corporation for dubious projects seems to have been easy — if you were willing to shell out massive ‘fees’ to connected gatekeepers. That’s the implication of the latest investment debacle amaBhungane has uncovered involving the troubled state pension fund manager.

The fixer behind the Public Investment Corporation’s (PIC’s) contentious investment in 1,000ha of empty land on the N12 highway between Klerksdorp and Stilfontein is fighting tooth and nail for a R180-million “transaction advisory fee” he claims he is owed.

The apparently outlandish fee — fully 35% of the total PIC investment of R510-million (ex-VAT) — is allegedly owed to retired military veteran Colonel Papi Kubu through his firm PKX Capital.

By way of comparison, advisory fees on PIC investments of this scale tend to be less than 2%.

What’s more, Kubu had agreed in writing to pay a board member of the Government Employees Pension Fund (GEPF) up to R50-million to help “facilitate” the deal — on the face of it, a gross conflict of interest since the PIC was investing the GEPF’s money.

Until now, this has been the hidden background to one of the most puzzling investments at the scandal-ridden state-owned asset manager.

The PIC bought an undivided 60% share in the land straddling the N12 for R586.5-million (including VAT) on behalf of the GEPF. It was meant to be the site of an ambitious mixed-use development, but this has not materialised and the GEPF now values its share of the property at only R178.8-million, according to its latest annual financial statements.

If Kubu’s fee was acknowledged as a liability, the value of the investment would drop to about R70-million.

Kubu has been in court since 2019 trying to get paid for setting up this deal in terms of an advisory agreement he signed with the erstwhile owners of the land, Isago@N12 Development (Isago), in 2017.

The legitimacy of the agreement is being challenged, and the case has resulted in a trove of documents and sworn statements becoming available that challenge the probity of yet another large PIC investment where well-connected individuals could still walk away with millions.

Vuyani Hako, the PIC’s executive head of property investment — under whose watch this deal was consummated in November 2018 — was recently placed on precautionary suspension pending an investigation into “allegations of wrongdoing”. It is not clear if the Isago land deal is the reason for his suspension.

pic r600m land deal matjila

Former Public Investment Corporation chief executive Dan Matjila. (Photo: Gallo Images / Phill Magakoe)

It was also possibly the last deal signed off by disgraced former PIC chief executive Dan Matjila, who delivered his resignation letter one day after approving the land purchase.

The former PIC boss, via his lawyers, told amaBhungane that his signing of the transaction documents does not mean he is the one who evaluated and approved it.

“The signing of documents by Dr Matjila was in order to give effect to the decision of the committee which arose from the outcomes of the process conducted by the Portfolio Management Committee and its recommendations to the Property FIP (Fund Investment Panel), and was in accordance with the PIC’s delegation of authority and investment policies,” he said.

“The signing of transaction agreements does not constitute a deal approval, but a step to give effect to the decision of the committee that has approved the transaction.”

Matjila added that “the approval was based on a thorough Due Diligence that included an independent valuation of the asset”.

He also emphasised there was no provision for payment by the PIC to any party who had not provided service to the PIC: “The fee in dispute has nothing to do with the PIC; it is between the respective parties.”

Yet even without the revelation of the bloated advisers’ fees, the deal was still bristling with red flags.

The PIC seemed unperturbed that previous land deals by the same company had been found to have vastly inflated property values. On the contrary, the state-owned asset manager seemingly accepted Isago’s own valuation of its land, without question. The PIC even set aside a large chunk of the investment to pay off Isago’s debt stemming from an older failed deal where values had allegedly been exaggerated.

Kubu had also earned a modest commission of R6-million on that deal, to which we will return.

The PIC has nonetheless previously defended the Isago transaction against criticism, even arguing that the price was a bargain.

This has now changed.

In response to amaBhungane’s detailed questions, the PIC has made an about-turn, admitting that “this historical transaction is the subject of an independent forensic review which is under way”.


The land deal had its origin in a “memorandum of agreement/commissions agreement” signed between Kubu and Isago in 2015.

Isago is co-owned by a George-based family, the Crauses, together with Klerksdorp medical doctor Martin Khunou. The company has owned the land involved in the deal since 2007. According to a witness statement by Isago’s Chris Crause, he had given up on developing the land and wanted to sell it off and move to Australia.

In terms of their agreement, Kubu, through his company PKX Capital, would “facilitate” the sale of the land to a consortium comprised of black business chamber Nafcoc and Veterans Development, a company of liberation stalwarts that included the since-deceased Caleb Motshabi.

The agreement recorded that “an opportunity has arisen in terms where ‘PKX’ can use his connections to facilitate the sale of the properties for the amount of R850-million (exclusive) for a commission/fee of R300-million”.

It is unclear where the R850-million price tag came from, or why Isago would be willing to walk away with only R550-million from its prospective sale of land for R850-million.

Kubu told amaBhungane by phone that he was to be the “paymaster”, meaning his “commission” would indirectly cover many other expenses.

One of these expenses was seemingly the “connections” cited in the agreement with Isago.

Kubu’s foremost connection appears to have been Dr Alex Mahapa, a board member of the GEPF — the same client of the PIC that would end up with the dud investment on its books. 

Mahapa was also a deputy director-general in the department of military veterans at the time, after having been a DDG at the department of public service and administration. 

He is currently a full-time special adviser to the acting minister of public service, Thulas Nxesi. He and Kubu both served on the advisory council on military veterans when the Isago deal came along.

Kubu appointed Mahapa’s company, Alfonso Business Enterprise, to approach the PIC for funding. In terms of two written agreements, Alfonso would earn a R20-million “facilitation” fee — or as much as R50-million if it could get the PIC, meaning the GEPF, to provide the full R850-million asking price.

As a result, Mahapa would simultaneously represent the interests of the GEPF and stand to personally earn millions by squeezing as much money out of it as possible for an investment that was highly speculative at best.

Mahapa declined to answer questions about his agreements with Kubu. 

Instead, he provided amaBhungane with a witness statement he had provided in the litigation that later ensued between Kubu and Isago. In it, Mahapa admits he was approached by Kubu “to assist them to get appointments with relevant officials in PIC”.

“In the first meeting, I went with them to present their proposal in PIC offices and they presented to Mr Kapei Phahlamohlaka and I… recused myself in the meeting since I was still a substitute board member of GEPF.”

Phahlamohlaka was a senior manager for direct investment at the PIC and remained Isago’s point of contact years later. He resigned from the PIC in 2021 to join Transnet as head of property.

Whether or not Mahapa was in the room, in his witness statement he fails to mention the multimillion-rand commissions he stood to earn when he initially did nothing but arrange a single meeting. 

Instead, Mahapa says Kubu asked him to work on the project full-time only after the PIC showed interest. He claims that he then immediately resigned from his government job, while his stint on the GEPF board was coming to an end in early 2017.

He claims he then signed a deal with Kubu that would see him earn 10% of whatever fee Kubu managed to score from the Isago transaction. Given Kubu and Isago’s target, this could have been up to R30-million — not much worse than their initial arrangement.

Said Phahlamohlaka: “PIC representatives, including myself on behalf of GEPF, held several meetings with different representatives of Isago discussing their proposed investment, including Papi Kubu and Dr Mahapa among others… At no stage was I pressured to have a meeting with anyone from Isago and/or PKX Capital, including Dr Mahapa,” he told amaBhungane.

“I have not been aware or privy to any agreements and/or promises of commission made between Dr Mahapa and Papi Kubu at the time of the transaction… However, I want to categorically state that I have never asked PIC to pay a commission amounting to R50-million for Isago or any transaction while employed at PIC. 

“A R50-million commission is excessive for any property transaction of the Isago value.”

Whatever amount Mahapa ultimately hoped to earn, his agreements with Kubu show the colonel was indeed meant to be a “paymaster” whose prospective R300-million fee would make its way into various pockets.

A new deal

According to the witness statement provided by Isago executive Chris Crause, the meeting brokered by Mahapa in late 2016 quickly bore fruit.

By 23 November that year, Isago had a non-binding expression of interest letter in hand, signed by Matjila. This was less than a month after Mahapa signed his R50-million commission agreement with Kubu.

By March the following year — apparently at the PIC’s insistence — the original consortium buying the Isago land with PIC funding had been replaced by the South African National Military Veterans Association (SANMVA) Trust, a creation of statute meant to represent the interests of veterans from all former liberation movements.

Along the way, the expected level of funding from the PIC was evidently also tempered from the original R850-million for 100% ownership, down to R680-million for a 60% share. 

On 27 October, Kubu and Isago signed a revised memorandum of agreement elaborating on the terms of Kubu’s payment in more detail and capturing these developments.

Now Kubu would receive a maximum fee of R240-million — provided that the PIC provided funding of at least R680-million for the SANMVA Trust and any partners to buy Isago land. If less money was forthcoming, the fee would reduce pro rata.

This agreement was signed by Kubu, Crause and his wife Doreen, who is a director of Isago.

As it turned out, the PIC later approved funding of R510-million (excluding VAT) which, according to the pro rata formula, entitled Kubu to R180-million instead of the R300-million initially agreed to. Percentage-wise it was still the same astonishing 35%.

There is no concrete evidence that the PIC at this point understood that the company to which it was giving more than half a billion rand planned to pay a third of that onwards to an adviser.

It was, however, far from the only problem with the deal.

Paying off other people’s debts

In March 2018, with the PIC yet to finally sign off, Isago was hit with a R137-million claim stemming from an ill-fated previous land sale it had also carried out with Kubu’s help. 

The application came from the curators of the Municipal Councillors’ Pension Fund (MCPF) and was accompanied by very serious suggestions of impropriety with the previous Isago deal.

In June 2015, the MCPF had sunk its money into 11 undeveloped Isago properties near Klerksdorp, which were hived off the massive tract involved in the PIC deal. Kubu had been the agent in this transaction, for a R6-million commission.

The Financial Services Board (now the FSCA) ordered an investigation and eventually appointed a so-called Section 26 board to take over the reins. This board slammed the prices paid to Isago as vastly inflated. 

The proper value of the R137-million investment was R46.5-million, according to their own independent valuer. 

The MCPF was finally put into curatorship in December 2017 and the curators went to court to recover the fund’s “investment” from Isago during March 2018.

The PIC’s decision to invest anyway, despite this history, raises serious questions.

pic r600m land deal hako

Vuyani Hako, the PIC’s suspended executive head of property investment. (Photo: Supplied)

On 5 April 2018, shortly after the MCPF claim, the PIC sent Isago an approval letter for a co-investment in the land signed by the now-suspended Hako.

Later that year, when the final purchase documents were signed by Matjila, they even specifically made an allowance for paying off the MCPF debt. 

They record that of the R510-million (ex-VAT) being invested, a total of R204-million would be made immediately available to settle the MCPF and other smaller claims against Isago.

It is not clear why the PIC would spend millions paying off a third-party debt where there was, at the very least, a suggestion of potential malfeasance. 

Irrespective of this, the balance of R306-million would go into an escrow account from where only the PIC (on behalf of the GEPF) could call for funds to be released. The idea was to ensure that there was always money at hand for spending on the actual development work.

Despite the clear allowance for the MCPF settlement, the PIC agreements made no mention of Kubu’s transaction fees, which allegedly added up to a larger part of the investment.

Dodgy invoices for alleged work

After the PIC investment came through in late 2018 and Isago’s creditors were paid off, Kubu sent his invoice. 

Dated 15 May 2019, it simply bills Isago a clean R180-million for “transaction advisory services”. There is every indication that Isago was initially going to try to pay up.

On 26 May, Isago forwarded the invoice to the PIC’s head of property, Hako, and requested a payment for “transaction advisory and related services” from the escrow account. The R306-million should be reduced to R126-million, it said.

As noted above, Phahlamohlaka viewed a R50-million fee as excessive — much less a R180-million one. 

PIC staff wanted more detail on the gargantuan fee and, on 3 June, reverted with a request for an itemised breakdown, underlying agreements and descriptions of what work had actually been done.

Far from strengthening Kubu’s case, the paperwork he submitted made it appear that justifications for the fee were being invented on the fly.

The itemised invoice seems to contradict the basis of the fee that had been presented to date — ie that PKX would simply get a 35% share of whatever funds were raised from the PIC.

Instead, Kubu now presented the 35% as being the incidental tally of real services rendered.

The invoice breakdown lists third-party invoices of R33.4-million, the bulk of which goes to Kubu’s contact at the GEPF, board member Dr Alex Mahapa. 

Mahapa would, through a company called Lamahapa Investment Holdings, get paid R20-million in terms of the consultancy agreement disclosed in his witness statement. 

The invoice also lists a “success fee” for Kubu of 8.9% (as opposed to 35%) on the R510-million, which still leaves the bulk of the invoice — R101.1-million — to be accounted for.

The invoice simply cites “transaction advisory services — hourly rate” for this amount, which happens to bring the grand total to exactly R180-million, or 35% of the total investment. 

A further breakdown of this line item claims that PKX dedicated exactly 6,350.4 hours to the transaction. It indicates that six people worked on the deal full-time and earned at least R4.6-million per year each.

It is hard not to conclude that the hourly charges were a clumsy attempt to justify the huge fee, after the fact.

The invoices from third parties that supposedly form part of the R180-million also raise questions. They are all dated between the PIC’s demand for documents on 3 June and 7 June 2019, which creates the impression that they were all hurriedly issued on command to help justify the fee to the PIC.

In the narrative report Kubu provided alongside the invoices, he however pointedly claims that he had discussed his fee with the “PIC management team” he dealt with as Isago’s adviser.

According to Kubu, the original transaction proposal had been to pay him first, and that this only changed when the MCPF claim “emerged”.

Kubu claims he “saved the project” by “allowing” Isago to use the upfront payment meant for PKX to instead settle with the MCPF.

Kubu did not answer detailed questions from amaBhungane, including the identity of this alleged “PIC management team”.

Knives out

After seemingly assenting to paying Kubu and formally requesting money from the PIC to do so, Isago suddenly changed its tune, leading to ongoing litigation and a criminal complaint of fraud.

Isago now argues that the deal envisaged in the fee agreement never happened, and that the one signed with the PIC was a completely different transaction they themselves had negotiated without help.

There is merit to this as the deal proposed in the fee agreement would have seen the PIC fund the SANMVA Trust to buy into Isago, while the ultimate transaction saw the PIC buy into the Isago property directly.

On a more serious note, both Isago’s Crause and Kubu have alleged fraud on the other side in relation to a suspicious alternative fee agreement dated January 2017, which entitled Kubu to 12% rather than 35%.

On Crause’s version, this agreement was drawn up in a hurry in April 2018 following the PIC’s approval letter and backdated at Kubu’s insistence. The idea is that he had to reduce his fee to stop the PIC from blocking it outright when it was discovered.

Kubu’s version is completely different. 

He claims Crause forged his signature on the backdated agreement, presumably to cheat him out of his full fee. He laid a criminal complaint of fraud in February 2020, which was investigated, but which the National Prosecuting Authority elected not to prosecute.

As things stand, a court ruling on Kubu’s civil claim is expected — while the 1,000ha of supposedly prime development land lies fallow. DM

The AmaBhungane Centre for Investigative Journalism is an independent non-profit organisation. We co-publish our investigations, which are free to access, to news sites like Daily Maverick. For more, visit us on


Comments - Please in order to comment.

  • André Pelser says:

    The entitlement and rent seeking is horrendous, a thorough forensic audit should be done of PIC and GPF finances, loans and funding.
    Is there no limit to criminality in South Africa? The lack of oversight is shocking.
    How can one trust this government when public taxes and savings are being wasted on such a scale?

  • Gregory Scott says:

    The combination of the incompetence of the PIC to carry out its mandate, the arrogant brashness of the so-called facilitators who earn the stratospheric transaction advisory fees and the incompetent co-conspirators at the PIC beggars belief.
    A huge word of thanks to Dewald van Rensburg for this article.

  • Tim Price says:

    The pillaging by connected cadres is out of control. “State capture era” – an era that has not ended and won’t until the ANC is removed from power.

  • L Dennis says:


Please peer review 3 community comments before your comment can be posted


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