7 highlights from Iqbal Survé's testimony at the PIC inquiry

Iqbal Survé, the chairperson of Independent Media and the head of Sekunjalo, concluded his testimony before the judicial commission of inquiry into the Public Investment Corporation on Tuesday.

The inquiry is investigating allegations of wrongdoing at the state-run asset manager, which manages R2.2trn in investments on behalf of public servants. 

The commission had previously heard testimony about how three companies linked to Survé - AYO Technology Solutions, Independent Media and Sagarmatha - sought funding from the PIC. 

Here are seven highlights from his two days of testimony. 

1. The PIC has stopped answering his emails

Companies linked to Survé have received about R5.35bn in funding from the PIC. This includes a R200m investment in Premier Fishing, R4.3bn in Ayo Technology Solutions, and R850m in Independent Media.

Sagarmatha, also part of the Sekunjalo group, had hoped to receive R3bn from the PIC, but the deal fell through.

At the commission on Tuesday Survé said he and his companies had been treated badly by the state-run asset manager as the corporation was now refusing to engage with him.

He said the PIC and the Government Employees Pension Fund was treating Independent Media with "complete disdain" by not answering emails.

2. He respects former PIC head Dan Matjila, and their businesses dealings were above board.  

Survé said he respected the former head of the PIC, Dan Matjila, but said it was false to say that he and Matjila had worked on backroom PIC investment deals together. 

The inquiry had previously heard evidence that Matjila went out of his way to invest in AYO. Matjila resigned from the corporation in mid-November 2018. 

But Survé said on Tuesday that negotiations between the asset manager and AYO or Sagarmatha had been between the boards of the companies and the PIC investment teams, not him and Matjila.

He suggested Matjila be asked to testify.

3. Independent Media has only paid back interest to Chinese investors, not the PIC 

Survé said that Independent Media, which received R850m in funding form the PIC in 2013, was not in a position to service the loan.

He said that the media group had been paying interest to another creditor - Interacom Investment Holdings - which comprises China International Television Corporation and the China Africa Development Fund.

"Until recently the interest payment to the Chinese had to be made because that was the structure of the transaction," he said.  

He said the only entity funding Independent Media was Sekunjalo, saying it had needed to put R300m into the media group to keep it running.

If the group is not recapitalised, there may be job losses. He added, "I really can't do that right now". 

4. South Africans don’t understand how to value some of his companies 

Survé, on a number of occasions, said that South African markets and financial institutions do not understand how to value multi-sided platforms. He said Sagarmatha was an example of an MSP, similar to Uber or Amazon.

"This is my expertise to be honest," he said. 

He told the commissioners he would send them copies of a Harvard Business Review article that sketched out how to really value MSPs. 

"The reason why Elon Musk isn’t in South Africa today is the markets wouldn't understand Elon Musk," he ventured. 

5. He still intends to list Sagarmatha on the NYSE

Survé said the initial plan had been to list Sagarmatha on the JSE and then later list on the NYSE.

The company was meant to unite the various groups in Survé's media empire under one technology and media roof. 

He said he still intended to list the company in New York. Had Sagarmatha listed, it could have had a market capitalisation of $10bn, he said,  

He said the PIC should have invested when it had the chance. "This is the best opportunity for the PIC to have made a tremendous amount of money."

PIC officials who previously testified at the inquiry said the Sagarmatha proposal raised red flags from the start, and the company was overvaluing itself. 

6. "I don’t do the news, the editors do the news"

Asked about independence at the newspapers in the Independent Media stable, Survé said he always told the editors to be balanced and not take sides.  

He said Independent Media was the "most objective media house in SA" and its "survival was based on objectivity". 

7. There's no reason for the PIC to want to recoup its AYO investment

Survé said there was no reason for the PIC  to recoup its R4.3bn investment in AYO saying it was sound.

"Let's sit down and talk and understand," he said. 

The PIC previously said it remains "committed to carry out to conclusion the steps that it had already taken to recover the invested funds without any delay".

Much of the PIC's R4.3bn investment has been lent out to asset managers to invest, the commission heard, but Survé said this was a normal business practice. 

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