PIC Commission: Time to find the truth
It’s increasingly important to highlight the full list of transactions rather than nitpicking for convenience
THE PUBLIC Investment Corporation (PIC) Commission resumes today in Pretoria.
The commission was initiated when United Democratic Movement leader Bantu Holomisa requested President Cyril Ramaphosa to investigate transactions involving the PIC dating back to 2015 under former chief executive Dan Matjila’s tenure.
When Holomisa called for the establishment of the commission, a series of major transactions were laid bare and since the commencement of the commission, it has become increasingly important to highlight the full list of transactions, including rather than nitpicking for convenience.
The PIC is one of the largest asset managers looking after the South African government’s public funds. The biggest client of the PIC is the Government Employee Pension Fund (GEPF), which constitutes approximately 90 percent of its fund under management.
The GEPF is guaranteed by the South African government. Any instances of malfeasance or corruption from the PIC are detrimental to members of the fund and the national fiscus.
Currently, as things stand, the commission has ignored the fact that the PIC board was fired by Minister of Finance Tito Mboweni a few weeks ago, after a showdown with his deputy Mondli Gungubele at an ANC NEC meeting.
Gungubele and the rest of the board have since offered to resign after they were implicated in a series of corruption scandals by whistle-blower James Noko, who mentions board members Sibusisiwe Zulu and her live-in lover Lawrence Mulaudzi.
The board’s widely circulated resignation letter has since been dismissed by experts and industry analysts as “grandstanding”.
James Noko also referred to an attempt by Gungubele and Zulu to participate in PIC transactions. Gungubele has since denied that he is involved in any transactions.
Several politicians have been implicated indirectly in these transitions and questions have been asked as to why Gungubele is still the deputy minister while he is embroiled in a corruption scandal.
Some of the board members, including ANC politicians, have been involved in scandals involving Ascendis, Steinhoff, Total, Karan Beef and EOH, MTN Nigeria and S&S Refinery. PIC is also an investor in loss-making media group Tiso Blackstar.
A deal involving Ayo Technology Solutions, which also received investment from the PIC is also under scrutiny. The PIC has also lost billions in EOH where the share price collapsed by 90 percent.
Holomisa mentioned that the PIC should investigate Harith Capital and Lebashe Investment Group where former deputy finance minister and chairperson of the PIC Jabu Moleketi is a member of the board.
Lebashe has since lost 70 percent of its investment in EOH. The commission seems to be ignoring all of the above transactions that were mentioned by Holomisa and were also covered extensively in the media.
The PIC Commission is also ignoring that R100 billion of PIC money was lost in investments in companies on the JSE that are not black.
The commission seems to be focusing on black-owned companies and it looks like there is an agenda where powerful forces are trying to prevent the PIC from supporting black business.
For the commission to restore its integrity, it needs to investigate the “untouchables”, which includes white businesses that received more than 95 percent of all funding from PIC on the JSE. To date, the fact is that almost R100bn of pensioner’s moneys have been lost to white-owned businesses in South Africa’s economic landscape.
These are important factors that require questioning as to why the commission has not investigated and has chosen to remain silent on these issues. Although it has been set up to look at these processes, at the end of the day, the commission by its own admission, said it would look at transactions that were in the media over the last few years.
It is clear that many of these transactions are significantly under water, especially the transaction involving S&S Oil Refinery and former minister of finance Nhlanhla Nene’s son.
It is also important to note that Nene served as deputy finance minister and chairperson of the PIC under former president Kgalema Motlanthe in 2008. The underlying issue is that the PIC Commission seems to be ignoring these transactions. South Africans need to know from the commission: Is it because of the involvement of Moleketi, businessman Jayendra Naidoo and Zulu?
Is the commission a whitewash for these powerful, untouchable figures and corruption at the PIC? The commission’s mandate is to look at transactions covered in the media over last the few years.
According to a letter drafted by Holomisa early last year, there have been several irregularities that were raised that could result in the impairment of GEPF to meet its obligations over the long-term.
In his letter to the president, Holomisa revealed a number of deals that needed further investigations by an independent party. The PIC lost R24bn on Steinhoff. Six months before the massive fraud at Steinhoff, the PIC invested R9.3bn with Lancaster Group led by Naidoo.
Since Steinhoff’s share price collapsed it appears that PIC has lost as much as R6bn in its investment with Lancaster, yet not one word has been raised by the commission. Is it because powerful interests are being protected?
Holomisa then further questions why nothing has been done about Steinhoff if billions were lost in favour of Naidoo and Citi Bank. “The compromising of the security package in favour of J Naidoo resulted in an impairment amount worth billions of rand. This could be up to R5bn possible losses for doing a favour for J Naidoo and Citibank,” he said.
Another deal that the PIC Commission has seemingly ignored is that of the S&S Oil Refinery in Mozambique, where the organisation’s funds are allegedly tied up in an asset that is currently not producing much of what has been projected.
Holomisa alleges that the sponsor, Momade Rassul, is alleged to be an underworld figure and is based in Nacala, a Northern Province of Mozambique. Rassul was also allegedly arrested on June 29, 2017, for money laundering, illicit enrichment, tax fraud, foreign currency manipulation, smuggling and misappropriation. According to Holomisa, Total’s investment at risk of full write-down is R1bn. He further highlighted another dodgy deal – widely reported in the media – involving Erin Energy and an American-Nigerian businessperson called Kase Lawal.
According to Holomisa’s letter to the president: “The ownership of the underlying oil asset by Erin Energy was disputed at the point of the PIC investment, but the PIC proceeded. Erin Energy failed to get full ownership of the asset.
“Considering the PIC’s $270 million (R3.77bn) equity investment and the fact that Erin had drawn $65.6m against the $100m PIC-backed loan, but held $9.1m in cash security, the PIC could lose roughly R4bn.”
The PIC commission has an opportunity to get to the bottom of R100bn in losses at the PIC if it has the courage to investigate all of the ANC politicians and board members, such as Zulu, that have been implicated by the whistle-blower.