Friday's extraordinary attack by Independent Media on critics of its executive chair, Dr Iqbal Survé, follows questions amaBhungane sent to Survé on Wednesday about the listing of another company he controls, Ayo Technology Solutions.Sagarmatha was due to list on the Johannesburg Stock Exchange (JSE) the previous Friday April 13, but the listing was aborted after the JSE withdrew its approval, based on technical shortcomings in meeting the listing requirements.AmaBhungane raised concerns ahead of the planned listing, principally about the possibility that Government Employees Pension Fund (GEPF) money, which is managed by the PIC, would be used to artificially boost the value of Sagarmatha.• Read Iqbal Survé's mythical beastNow information has emerged suggesting those fears were well founded – including details of an earlier Survé deal, involving Ayo Technology, which was propped up with R4.3bn of government pension fund cash.Private placementCentral to both deals was a process known as a private placement, in which an offer of shares is made to selected private investors.In these two cases (Sagarmatha and Ayo), this was done prior to the stock listing on the JSE to make shares available to the broader public.The companies both issued pre-listing statements aimed at selected private investors and setting out the historical performance of the companies and a forecast of their positive prospects.Private placements are more risky for investors - they are asked to buy shares without a broad marketplace assessment of how much the shares are really worth - so companies will usually need to offer an attractive discount to private investors.That's where these two deals were so remarkable - and troubling.Both Sagarmatha and Ayo offered the private placement at what were arguably inflated prices.The captive investorThey could do this, seemingly, only because they had a "captive" investor: The PIC.Ayo had requested the PIC to invest approximately R4.3bn for 99.8 million shares at R43 per share, which amounted to 29.9% of Ayo, and all - 100% - of Ayo's planned private placement.No one else but the PIC bought these shares at this price prior to the listing.Who owns whom?Both Ayo and Sagarmatha were effectively controlled by Sekunjalo Investment Holdings, a vehicle for the Survé family trust.For Ayo, the cascade of ownership was as follows.At the time of the pre-listing private placement offer, 80% of Ayo was held by a company called African Equity Empowerment Investments (AEEI).AEEI - which also owns Premier Fishing - was in fact already listed on the JSE.AEEI also already owned 30% of BT Communications Services SA, the South African arm of British Telecommunications. Take note of that.Sekunjalo, whose ultimate ownership and control vests in Survé, through his family trust, held 61% of AEEI.To recap: Before the private placement, Sekunjalo held 61% of AEEI, which in turn held 80% of Ayo, which, combining the percentages, gave the Survé family an effective 48.8% interest in Ayo.Value for money?Private placements and listings both usually mean issuing new shares, meaning that existing share ownership is diluted.For example, if there are 100 shares in a company and I own 100%, then if I issue 100 new shares to other investors, my shareholding will drop to 50% and this will normally also dilute the value of my shares.One way of assessing the value of a company is the net asset value per share. The net asset value is the difference between a company's assets and its liabilities - although companies are also valued based on their earning potential going forward.According to the pre-listing statement for Ayo, the net asset value prior to the restructuring was 15 cents per share, as of August 2017.In December 2017, the PIC agreed to inject R4.3bn of GEPF money at R43 per share (for 29% of Ayo).Ayo then also issued 31.96 million shares to a black economic empowerment (BEE) consortium for R1.50 per share, raising another R48m.The injection of all that cash raised the net asset value from 15 cents per share to R12.47 - an increase of more than 8 000%.Iqbal's windfallMost of that benefit went to the Survé family.Given the issue of new shares to the GEPF and to the BEE consortium, the effective interest of the Survé family in Ayo dropped from 48.8% to 29.9%, however, the net asset value of their interest in Ayo rose from about R16m to R1.3bn.Yes, that is R1.3bn.We put it to both Survé and the PIC that this appeared to be a massive and unjustifiable enrichment of one family at the expense of government employee pensions.Survé did not respond to questions at all, except through his publications, effectively labelling his critics as apartheid agents and comparing himself to Winnie Madikizela-Mandela.The PIC didn't answer specific questions either but noted: "Ayo Technology Solutions is a listed entity and the PIC wishes not to make comments or put into the public domain information that may affect the stock. It is, however, sufficient to point out that the investment in Ayo Technology Solutions, as with all the investments, followed the necessary internal investment approval processes."Unrealistic valuationThe value to Survé from the PIC investment does not even take into account the unrealistic valuation of R43 per share that the stock trades at - or doesn't, seeing as the share hardly trades at all.The listing price was set by the R43 per share paid by the PIC, but other investors are not biting at all at that price.The only major movement of the share price since the JSE listing on 8 January 2018 shows how thin the trade in Ayo is.On 26 February, a sale of just 1 139 shares (out of a listed total of 343-million shares) led to a price drop in one day of 43%.We put it to PIC and Survé that this demonstrated how unrealistic the valuation of R43 per share was. They did not respond.Extracting cash?This makes it hard for the Survé family to sell shares to realise the benefit of the PIC's cash injection, but that is not the end of the story.The main rationalisation for the private placement was for Ayo to acquire the 30% stake in the South African arm of British Telecommunications for approximately R1bn.But, as we have seen, that was already owned by another Survé family-controlled company, AEEI.In effect R1bn in GEPF cash was used to transfer an asset from one company controlled by the Survé family, AEEI, to another, Ayo.We put it to the PIC: "We are struggling to understand the benefit to the GEPF of the way in which transaction was structured, given that AEEI itself was listed and the PIC could have accessed these same assets on a significantly cheaper basis via an investment directly in AEEI."This was because AEEI, which owned the 30% of BT and 80% of Ayo, was already trading on the JSE at a much lower price than R43 per share.For example, on December 13, 2017, shortly before the PIC made its decision, AEEI was trading at R5.30 per share.The PIC did not respond.We put it to Survé: "We are given to understand that much or all of this R1bn windfall for AEEI shareholders is likely to be distributed in the form of dividends to AEEI shareholders, of which the Survé family trust, via Sekunjalo Investment Holdings, holds a 61% majority. Please comment."He did not respond.The PIC's roleThe rest of the GEPF cash - a war-chest of some R3bn - is to be used to build the relationship with the British multinational, to buy up other companies and to leverage Ayo's BEE credentials to gain a bigger slice of the South African technology market.The PIC has given Ayo a massive boost in relation to competitors, such as EOH - so the basis on which the state-owned investor creates winners and losers in the market demands scrutiny.Information emerging from the PIC is not reassuring.The investment proposal for Ayo was tabled at the last moment: on December 20, the day before the due listing date, creating a risk of undue pressure on the investment committee - although the listing eventually happened only on January 8.Some of the PIC's top brass were on holiday, though the influential PIC chief executive, Dr Dan Matjila, is said to have returned from leave specially to preside over the meeting.ConcernsDocuments from the investment committee meeting, seen by amaBhungane, disclose several concerns about the Ayo deal.The comprehensive due diligence approval process was waived.Assessment team members were concerned that a number of Ayo's board members were closely linked to AEEI and were not truly independent, possibly leading to a conflict of interest.The tight timeframes to raise R4.3bn might have forced the PIC to sell shares in other companies to raise the necessary cash, which might have meant getting weaker prices for the shares, especially in low liquidity markets during the holiday period.Nevertheless the investment was approved, subject to the assessment teams performing a complete due diligence and providing feedback to the committee.Further, the committee clearly had some concern about the validity of the R43 price per share, because it placed another condition, namely that the PIC and Ayo enter into a put option to protect PIC's clients against a share price decline.A put option is a kind of insurance, which, at a cost, ensures that shares can be sold at a fixed price, should the share price drop.We asked the PIC if these conditions were met. They did not respond.Sagarmatha TechnologiesSome of the concerns around Ayo were already known to amaBhungane when the pre-listing statement for Sagarmatha was issued at the end of March.Sagarmatha, the "African unicorn" which was to house Survé's media and online shopping interests, seemed to be following the same script, with a private placement being touted at R39.62 per share, for a company with a negative net asset value.Despite the presence of several prominent named investors who were advertised as being committed to invest at that price, the suspicion was that PIC money would again really sweeten the deal.Those fears proved well-founded.AmaBhungane has confirmed that the same pressured timetable was followed and the PIC investment committee met on Wednesday April 11, 2018 to decide whether to fund Sagarmatha - just two days before the revised listing date of Friday April 13.The bid ultimately failed, to Survé's evident fury, but once again there are questions about the procedures followed by the PIC.Sources with knowledge of the 11th hour meeting said that one of the loudest voices lobbying for the PIC to buy an undisclosed stake in Sagarmatha was chief executive Matjila.It is alleged that Matjila went so far as to deliver letters of support from trade unions who stood to benefit from the investment.Sources with knowledge of the PIC's meeting allege Matjila offered to arrange a meeting between the investment committee and Sagarmatha executives in a bid to change their mind.One source described Matjila's attempts to push through the deal as "suicidal" in that it raised serious questions about his independence and his ability to act in the best interests of the PIC and its clients.The PIC's responsePIC head of corporate affairs Deon Botha told amaBhungane: "The Public Investment Corporation was requested to participate in the private placement of shares in anticipation of the public listing of Sagarmatha Technologies…"Following the deliberations by the Investment Committee, it was decided that the PIC will not participate or invest in Sagarmatha's private placement..."Botha would not confirm whether Matjila had gone to bat for Sagarmatha or the quantum of the proposed investment, saying that both the proposal and the discussions that followed were "confidential".He added: "If amaBhungane wishes to place reliance on leaked information from a closed meeting by (an) anonymous source(s), and present allegations arising from such leaks as fact, it would be very unfortunate."In response to follow-up questions about Ayo, Botha said: "It is clear from the list of your questions that you are insinuating wrong doing on the side of the PIC and that PIC chief executive officer, Dr Daniel Matjila, is behind these transactions."This is unfortunate. The PIC processes are such that no one individual takes investment decisions. All investments are taken by specific investment committees in line with the approved delegation of authority and due diligence is a key component of the investment process."Investment in Ayo is no different. We also note that you keep on referring to PIC documents in your possession, which according to our knowledge, were never officially given to you. The only conclusion we can draw from this is that the documents were obtained fraudulently and are part of a concerted effort to undermine and cast aspersions on the PIC."Indicative commitmentsSagarmatha was required to secure R3bn through the private placement of shares by the close of business on that Wednesday if it wished to proceed with the listing. In a written statement Sagarmatha said it received "indicative commitments" of more than R4bn, "therefore comfortably meeting the minimum listing requirements of the JSE."Although Sagarmatha was informed of the JSE's decision on Tuesday April 10, it waited a full 24 hours - until after the PIC rejected the investment - in order to make the announcement to the market.Sagarmatha explained the delay, saying it "was hopeful it could resolve this issue with the regulator" and that only when its request was denied did it make the news public. The company remains vague about whether it plans to reapply for a new listing date.However, the delay raises suspicions that Sagarmatha's failure to secure PIC funding also played a role in the company’s decision.Despite the company saying it had R4.2bn in commitments from other investors, the failed bid for PIC investment appeared to rankle.AttackOn Friday, Independent Media launched an unprecedented co-ordinated attack on fellow journalists in which it complained: "The PIC was unduly pressured by journalists from Tiso Blackstar, Daily Maverick, and amaBhungane. The PIC eventually caved in to pressure and declined to invest in Sagarmatha Technologies."It claimed to have evidence, without disclosing it, which "pointed to a dirty tricks campaign similar to those employed by Stratcom during the apartheid era to demonise struggle activists like Winnie Madikizela-Mandela - but in this instance, the campaign was aimed at Independent Media and its executive chairman, Dr Iqbal Survé".While these unsupported allegations have been condemned by the South African National Editors Forum (Sanef), they are atmospheric and serve to create a platform for Survé to drum up support among any friends he may still have at the PIC.Whether Sagarmatha will make another run at getting GEPF money, or whether other deals are at stake, is an open question. Watch this space.- Additional reporting by Susan ComrieThe amaBhungane Centre for Investigative Journalism produced this story. Like it? Be an amaB supporter and help us do more. Know more? Send us a tip-off.