PIC ‘treats black business unfairly’
Businessman says asset manager tries to control the entities it invests in
Businessman Kholofelo Maponya has hit out at the treatment meted out to black businesses by the Public Investment Corporation (PIC).
Maponya, of Matome Maponya Investment (MMI), on Wednesday told parliament’s standing committee on finance that MMI subsidiaries have been ill-treated by Africa’s largest asset manager.
“The mistake the PIC makes, first, is assuming they can run a business from their offices as opposed to trusting the investee as a partner/jockey, which is the main reason why they partner in the first place,” Maponya said.
“Second, the PIC assumes that once they have funded an entrepreneur, it is their business and no longer the entrepreneur’s business, and they dictate how it should be run instead of concentrating on governance and support.”
“This is the main reason the South African economy has not been growing and is not poised too,” he said, adding that the term white monopoly capital was relevant in this instance as the “PIC is an enabler of continued privilege, uncompetitive behaviour, non-transformation and stifling of growth”.
The PIC has significant investments in the MMI group of companies. These include Magae Makhaya, mortgage lender SA Home Loans, Bafepi Agri and Daybreak.
Sunday World reported in November last year that the PIC had taken Maponya and his companies, Bafepi Agri and MMI, to court after it accused the entities of having failed to repay loans of more than R500-million advanced to them to invest in the agricultural sector in 2014.
Maponya Hofman Sechaba in 2014 acquired a commercial farm which specialised in rearing poultry for commercial purposes. This farm was adjacent a poultry farm owned by Afgri Poultry (now trading as Daybreak Farms).
The PIC and Bafepi Agri entered into a voting pool agreement to vote together on certain matters. However, according to Maponya, the deal did not unfold as planned as the investment and business case moved from operational returns to an investment one, but agreements and mandates were not adjusted.
“Dividends could no longer be paid as per our projections and investment case due to policy change [PIC continued to compound interest].
“We were excluded from operations completely against the spirit of our funding agreement and voting pool agreement,” Maponya said.
Daybreak is one of the country’s leading poultry producers. It is wholly owned by the Unemployment Insurance Fund, the Compensation Fund, and the Government Employees Pension Fund (GEPF) and is represented by the PIC as an agent.
Maponya pleaded with MPS to intervene and ensure that the PIC treats the group fairly and reaches an amicable agreement over numerous disputes.
PIC CEO Abel Sithole denied that the asset manager was targeting black companies, saying that the company was merely holding parties accountable for contracts entered into.
The PIC in a statement also denied allegations that its chairperson, Reuel Khoza, tried to buy a stake in SA Home Loans from MMI “for the price you could buy toilet paper”.
“The PIC wishes to reiterate, as it did during the standing committee on finance meeting, that it is not aware of such a proposal and has not been approached to fund its chairperson to acquire a stake in SA Home Loans or any transaction,” the entity said.
Maponya is currently in court with the PIC trying to force it to fork out more than R45 million in transaction and origination fees for work MMI conducted on behalf of SA Home Loans and the state asset manager.
Maponya’s demands relate to a loan that was extended by the PIC to SA Home Loans to provide home financing for members of the GEPF.
Businessman Maponya is a shareholder of SA Home Loans through MMI.