Mkhize's R4.5m kickback allegations ‘malicious’- PIC

The Public Investment Corporation (PIC), which manages State pension funds, has slammed a newspaper report that Cooperative Governance and Traditional Affairs (CoGTA) Minister Zweli Mkhize earned R4.5m in kickbacks as being “malicious” and “patently false”.

The PIC issued a statement on Monday, following a report in the Sunday Times that Mkhize had facilitated a loan for Afric Oil.

Mkhize had released a separate statement on Sunday in which he labelled the allegations as a “ridiculous and malicious fabrication”.

“I have never facilitated the said loan negotiations nor have I sought any 'facilitation fee' from the said company. It is extremely unacceptable and mischievous for my name to be dragged into a matter that I have nothing to do with in this manner,” the statement read.

Mkhize is seeking legal advice on the matter, News24 reported.

In its statement in response to the Sunday Times report the PIC provided its version of the transaction. 

The PIC's investment in oil company Afric Oil originated in September 2014 with a direct equity stake of 29%, worth R97m. 

The PIC approved a further R210m loan in January 2017 for Afric Oil’s expansion plan. This included growing its logistics division, the acquisition of storage facilities and the provision of working capital, according to the statement.

“The PIC regards Afric Oil as an important emerging fuel supplier – the first black empowered entity in the petroleum industry - with the potential to create jobs and advance entrepreneurship. The transaction resides in the PIC’s unlisted portfolio – known as the Isibiya Fund,” the PIC said. 

False allegations

The PIC denied claims that facilitation fees were paid to Mkhize for the Afric Oil transaction.

It further defended its investment processes as being independent, reiterating statements made by Matjila to Parliament’s Standing Committee of Finance (Scof) about the PIC’s investment processes.

Applications for investments are received by the PIC, which then goes through what he said was a rigorous process of due diligence. A committee has the final say over approvals, Matjila told the committee.

“The PIC’s investment processes is such that no one person – in particular the PIC CEO - is vested with all the powers to unilaterally make investment decisions,” the statement read.

“The PIC manages the funds of all its clients within strictly prescribed investment mandates determined by its clients, is regulated by the Financial Sector Conduct Authority, is subject to provisions the Public Finance Management Act and is audited by the Auditor General.”

Scof in turn issued its own statement on Monday, indicating that it takes allegations about questionable deals by the PIC seriously, as it manages close to R2trn worth of assets.

The committee is currently processing a private member’s bill, submitted by DA MP David Maynier, and a committee bill, both with the aim of improving transparency of PIC transactions.

At a hearing before the committee last week, the PIC defended its investments, including Ayo Technology, and explained its association with VBS Mutual Bank, which is now in curatorship.

“The committee has met with the PIC nine times over the past nine months, many times more than any other entity that falls within its portfolio.

“This demonstrates clearly the committee’s commitment to its oversight and legislative role, and also shows its concern for issues at the PIC,” Scof chair Yunus Carrim said.

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