Holomisa drops PIC bombshell

UDM leader lifts lid on dodgy fund dealings

UDM leader Bantu Holomisa has lifted the lid on a “cartel” of politicians, civil servants, investment advisers, asset fund managers and businessmen for allegedly turning the Public Investment Corporation (PIC) into their cash cow.

In a bombshell testimony before the commission of inquiry into alleged improprieties at the PIC on Wednesday, Holomisa named former deputy finance minister and PIC chairperson Jabu Moleketi, PIC director Sibusisiwe Zulu and businessmen Lawrence Mulaudzi and Tshepo Mahloele as the key players at the centre of the multibillion-rand self-enrichment spider web.

He also implored the Mpati Commission to probe the alleged role of investment advisers and asset managers, especially those outside South Africa.

Insisting that he saw cartel behaviour, the UDM leader urged the commission to take a closer look at the Harith/ Lebashe deal, headed by Moleketi and Mahloele, the former PIC head of corporate investment.

Moleketi, a deputy finance minister under former president Thabo Mbeki, is a current non-executive director of BEE company Lebashe Investment Group, and also chairperson of asset fund management firm Harith General Partners and Harith Fund Managers.

Mulaudzi, who allegedly fixes PIC funding deals in exchange for a lucrative commission, has previously admitted to a close relationship with Zulu.

This came as the Companies and Intellectual Property Commission’s demand that the PIC’s R4.3 billion investment in the JSE-listed AYO Technology Solutions should be recovered within 15 days came under scrutiny in court, with its two critics dismissing it as reckless, irrational and unrealistic.

Holomisa found it interesting that the Pan African Infrastructure Development Fund I and II (PAIDF) was set up by Mahloele, while he was at the PIC, and then Harith manages the PAIDF on behalf of the PIC, where Mahloele is chief executive. Holomisa said: “Regarding Lebashe, we have been made to understand that the following information and questions are pertinent:

Lebashe is made up of several companies. The key players in Lebashe are Mahloele, Moleketi and Warren Wheatley.

Lebashe reportedly obtained a loan from the PIC for rapid expansion, with the said loan having reportedly already been repaid.

This may raise questions regarding the basis for the PIC granting a loan to Lebashe when key former PIC individuals are controlling and owning Lebashe. The value of the loan is unknown.

How was this loan obtained and on what terms?

Lebashe had gone on to acquire large stakes in Capitec Bank, EOH and T88 Capital, but it was unclear where the funding for these major acquisitions emanated from.

Lebashe has also acquired an undisclosed stake in 4 Africa Exchange, where Mahloele is a director.

Lebashe operates from the same address as Harith: 34 Impala Road.

Holomisa said all of these transactions with related parties might be questionable.

It was unclear if these decisions were taken in compliance with the provisions of the Companies Act, and have been reported accurately in terms of IAS 24.

“Regarding Lanseria, we have been made to understand the following:

According to the PIC’s 2017 annual report, the PIC and the PAIDF collectively own 50% of Lanseria.

PAIDF is currently being managed by Harith.

Lanseria Holdings owns the remaining 50%.

Mr Mahloele is a director of Lanseria Holdings.

Holomisa told the commission that Lebashe had a Charters and Aviation Finance arm in which Mahloele was a director. “It would be beneficial for such a company to have access to ownership in an airport when it is involved in charters and aviation finance, albeit indirectly through its director, Mahloele.”

Holomisa added: “An area of investigation the commission should be interested in is the alleged role of investment advisers and asset managers, especially those outside our borders. Such companies/persons appear to include Sao Capital (of Nana Sao from Ghana, based in London), Kurhisani (of Kingdom Mugadza from Zimbabwe) and Harith/ Lebashe (South Africa), headed by the former deputy finance minister and PIC chairperson Jabu Moleketi and Tshepo Mahloele. When one looks at the allegations that these companies/persons had (or have) easy access to PIC funds, one would conclude this has all the earmarks of a cartel.”

He said the commission would be well advised to check on whether any dealings with these individuals or companies were in line with standard market practice, as there were allegations that they were paid exorbitant consultancy fees.

“One other transaction that needs careful scrutiny is the Pan African Infrastructure Development Fund I and II.

“Where are these monies invested? Are these deals with other countries, or private individuals? asked Holomisa.

“Where are its assets registered and how much are they worth?

As for Mulaudzi, Holomisa urged retired judge Lex Mpati to scrutinise why it seemed so easy for the businessman to gain access to PIC funding.

He referred the commission to the alleged funding support for Kefolile Health Investments for the subscription of Ascendis Health and Bounty Brands shareholding.

He said the Kefolile deal, which involved the PIC and some other common role-players, had been for an aggregate amount of R1.775 billion funding support.

“The alleged common role-player in this and the Project Atlas deal is Mr Mulaudzi. We think you would be wise to enquire what his role had been in both deals, whether he received transactional incentives and, most importantly, if all the allegations are true, why it seems so easy for Mr Mulaudzi to gain access to PIC funding.

“Using the documents I am handing over to the commission, it could verify with the PIC’s management, especially staffer Mr Roy Rajdhar, and former chief executive Dr Dan Matjila… the PlC’s apparent ever-willingness to finance Mr Mulaudzi’s companies,” said Holomisa.

He said the commission would also be well advised to scrutinise these records and verify how many companies were linked to Mulaudzi.

“Following the money trail, the files contain a ‘consumer trace report’ which reveals the over 30 companies in which Mr Mulaudzi seemingly plays an active role, as well as the four landline and six cellphone numbers that are ostensibly associated with him,” he said.

Holomisa added that, scrutinising the information, he came across a text message that was an apparent conversation between Mulaudzi and a certain board member where he appears to be pressing for a payment to be done, and he had even forwarded what could be his bank account details.

He said this seemed to enforce the idea that Mulaudzi had a hotline to the PIC management.

Of note was that Mulaudzi was in a relationship with Zulu.

“It has never been a secret that in 2018 Ms Zulu and I developed a close friendship that ultimately translated into a relationship.

“This relationship was never informed by our careers but rather our common social interests,” said Mulaudzi in a statement shortly after allegations made by whistle-blower James Noko.

He said that as a businessman, he had interacted with the PIC, but denied engaging with Zulu regarding his interactions.

In conclusion, Holomisa warned the commission not to rush its work if it wanted to get to the bottom of the allegations of impropriety within the institution.

Maintaining that the PIC was “in the intensive care unit”, he urged Mpati to ask for a deadline extension.

“You cannot be rushed, therefore, to meet a deadline of April; yet, you have not been given tools to effect your work. Don’t compromise yourself, please.”

President Cyril Ramaphosa appointed the Mpati Commission last year and gave it six months to finish its work.