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The board of the Public Investment Corporation (PIC) on Tuesday announced that it has suspended one of its executives and a staff member following the completion of a preliminary probe report into the Ayo Technology Solution transaction.
The report was submitted to the PIC board on Monday. The report “clearly reflects a blatant flouting of governance and approval processes of the PIC” and PIC employees had been implicated in these irregularities, a statement from the PIC said.
The PIC board had resolved to suspend the PIC executive head of listed investments, Fidelis Madavo, and the PIC assistant portfolio manager, Victor Seanie, with immediate effect.
“This is an ongoing investigation, the board will keep all its stakeholders informed on developments,” the PIC said in a statement.
It is the second day of the commission of inquiry looking into the affairs of the Public Investment Corporation, which started its first public sitting on Monday.
It emerged today that the PIC board last night suspended Madavo, according to the commission’s evidence leader advocate Jannie Lubbe.
Madavo is testifying at the commission today in Pretoria despite being suspended.
Later today, Chris Polowane, PIC executive head of human resources, is set to testify.
Madavo told the commission during this testimony that about 80% of the R2 trillion that PIC manages was invested in equities and more than R1 trillion was “parked on the JSE”.
He said that the PIC had recently increased its stake in MTN, which is a company that has been “found wanting”. He put the PIC’s stake in MTN at 26%.
Madavo said that the PIC took the environmental, social and governance aspects of investing “very seriously”.
City Press first revealed irregularities at the PIC in March last year and reported that the PIC waived its normal due diligence processes to invest R4.3 billion in media mogul Iqbal Survé’s latest venture.
Read: PIC’s R4.3bn ‘risky’ investment
The decision, according to an explosive set of documents, was based on “very optimistic” forecasts and taken without access to proper financial information.
Insiders believed that the state-owned asset manager had, in effect, given Survé’s Sekunjalo group the money it needed to repay an earlier PIC loan.
The R4.3 billion investment into Ayo Technology Solutions, which listed on the JSE on December 21, was approved on December 20 at a special meeting of the PIC’s portfolio management committee for listed investments.
Apart from PIC chief executive officer Daniel Matjila and chief financial officer Matshepo More, almost all the usual executives and managers who would have attended such a meeting were on leave. Acting heads and managers took their place.
The deal was that the PIC would buy a 29% stake in Ayo in a private placing before it listed.
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