The re-evaluation of an investment in Bophelo Insurance Group (BIG) has come back to bite the Public Investment Corporation (PIC) in the company’s audit report of its 2018 financial year, causing an impairment loss of over R82.2m.
Auditor General Kimi Makwetu gave the PIC an unqualified audit with findings.
The PIC reportedly entrusted more than R3.5bn to Mvunonala, of which Bophelo Insurance Group is a subsidiary.
The PIC is also in the process of probing its CEO Dan Matjila for allegations including private e-mails which claim that he by-passed processes to arrange a contract for a close associate. Matjila has denied the allegations.
In his audit report, Makwetu said while he believed that the audit evidence that he obtained was sufficient and appropriate to provide a basis for his finding, PIC’s link to BIG was a point of emphasis.
“As disclosed in note 21 to the financial statements, impairment loss of R82 296 000 was incurred as a result of a revaluation of the investment in BIG to a net realisable value of nil,” said Makwetu.
According to the board’s remarks in the annual report, PIC has a 46% shareholding in Harith Fund Managers, 30% shareholding in Harith General Partners, 30% in Bophelo Insurance Group and 7% in the SA SME Fund.
This article was updated to remove the investigations of Bophelo Benefits Scheme's missing R225m, as this is unrelated to the PIC and the R82m impairment referred to in the Auditor General's report.