The Public Investment Corporation had to liquidate other assets in order to free up funds for the R4.3bn investment in AYO Technology Solutions, the commission of inquiry into the state-owned fund manager heard on Tuesday.
The PIC Portfolio Manager of Listed Properties revealed that former CEO Dan Matjila gave an instruction to the investment team to "liquidate some positions to create liquidity for the transaction" which was concluded in December 2017.
"Dr Dan sent the instruction via email as requested which said that we should create liquidity to settle the subscription in AYO," said Gaanewe Adams.
She said she could not remember all the stocks they had to sell in order to access the funds, with the exception of Anglo American shares. Adams promised to furnish the inquiry panel with a full list of assets that were sold.
She also stated that Matjila gave the go-ahead for the settlement of the transaction, despite it not being approved by the Portfolio Management Committee (PMC).
"I do not recall a transaction whereby the payment memo was signed before the PMC," she said.
She added that there was a lot of time pressure to get the deal done prior to the listing on December 21.
The controversial investment in the company, which is linked to businessman Iqbal Survé, has dominated evidence heard by the inquiry, which is probing allegations of impropriety in the corporation that manages the government employees' pensions.
Paying back the money
Meanwhile, the Companies and Intellectual Property Commission has undertaken to temporarily suspend the notice of compliance against the PIC in respect of the R4.3bn that must be recovered from AYO.
This undertaking was made in the North Gauteng High Court on Tuesday, pending a court application between the two parties which will be on the roll next week.
The CIPC issued a compliance notice to the PIC's board on February 21, which requires the asset manager to recover the capital investment made to AYO Technology Solutions within 15 business days of the date of the notice. It also has six months to recover any interest accrued on the investment.
The notice period expires on 14 March. Failure to comply with the notice may result in prosecution, with a maximum penalty of an administrative fine or 12 months' imprisonment.
The PIC brought a notice of motion in the North Gauteng High Court last week with the CIPC as respondent, which it said was due to concerns over being able to meet the deadline. It was still committed to recouping losses related to its AYO investment, it said.
The PIC denied it was "collaborating" with AYO by opposing the compliance notice.
According to AYO, it is applying to the court to have the notice issued by the CIPC set aside altogether.