Attack on PIC for Sekunjalo Ind. Media liquidation 'dubious', says ex-chair Gungubele

Former deputy finance minister and ex-chairperson of the Public Investment Corporation (PIC), Mondli Gungubele, has denounced recent criticism by some senior ANC leaders of the state-run asset manager, following its application to recoup its investment from Sekunjalo Independent Media (SIM). 

The PIC in November announced it had filed an application for the liquidation of (SIM), an entity that falls under businessman Iqbal Survé's investment holding company Sekunjalo, over the non-servicing of a 2013 loan that helped it buy out Independent Media SA from its former Irish owners. 

The liquidation application has strained the already-fraught relationship between the Sekunjalo group of companies and the asset manager, which has invested in several of Survé's companies. 

ANC Secretary General Ace Magashule, and his deputy Jessie Duarte have both publicly questioned the PIC's motive for the application in opinion pieces published on iol.co.za, the online arm of Independent Media. 

Speaking to Fin24 on Friday, Gungubele said criticism levelled against the the PIC over its pursuit of Sekunjalo was "dubious" and showed disregard for protection of what he called "a national asset".

"When they [PIC] say Sekunjalo owes us, and are defaulting ... they have a financial obligation to collect that money, and one of the methods they have is to liquidate them," said Gungubele. “It is the workers money, we cannot have senior leaders in the country attacking them. It is dubious.”

Sekunjalo Independent Media is a special purpose holding company set up in 2013 to buy out Independent Media SA from its former Irish owners.

It owns 55% of Independent Media – the parent company of titles including The Star, the Cape Times, the Weekend Argus and the website iol.co.za. Survé, the executive chairperson of investment holding company Sekunjalo, is also the chairperson of Independent Media.

Magashule and Duarte, in their opinion pieces, alleged that Sekunjalo is being unfairly targeted, as no similar action has been taken against other companies who have squandered PIC investments.

In a column published early this month, Magashule said the company was targeted for its independent reporting.  But Gungubele is not convinced.

"This thing that it’s a fight for independent media, it’s a smoke screen," he said, adding that the asset manager - which manages R2.1trn on behalf of public employees pension funds - is a critical vehicle which could be used to turn around the sluggish economy.

Insult to black empowerment

He added that “whenever we ask questions, we are told that Sekunjalo is empowering black people," adding that the notion implied that empowerment companies were allowed to get away with mismanagement and not follow regulations.

"That is an insult to black empowerment."

SIM has denied it owes the PIC anything, and labelled the application "frivolous".

Gungubele further expressed disappointment at the silence of labour unions on the matter, whose primary interest, he said, is to safeguard the interests of workers.

“I’m also worried that the labour unions are not speaking up on the matter. I cannot say they have an unclean relationship with Sekunjalo, I don’t have evidence, but their behaviour leaves much to be desired”.

“If they don’t want us to suspect a corrupt relationship between them and Sekunjalo, then they must stop what they are doing".

According to a report by Amabhungane, the PIC in September demanded repayment of R609 203 987 from SIM, but nothing was forthcoming.The funds were due more than a year ago in terms of a 2013 loan agreement which called for an initial advance R579 683 083 to be repaid within five years.  The report stated that SIM had repaid R325 750 000, but interest larger than that has also accrued, leaving an outstanding balance of R609 203 987 as of 30 June 2019. 

General Secretary of the South African Federation of Trade Unions (SAFTU), Zwelinzima Vavi, who has been vocal about allegations of financial misconduct at the PIC said his federation was in favour of the recovery of pensioners' money.

"We may not have been vocal, but that does not mean there is something sinister," said Vavi adding that criticism of the liquidation application must not be at the expense of workers' money.

The SIM loan was advanced by the Government Employees Pension Fund (GEPF) through the PIC, which invests on behalf of the fund.

The PIC, meanwhile, has hit back at claims its liquidation application is an assault on media freedom and the transformation of SA's media landscape, saying in a statement that the liquidation bid is a a legal matter of "commercial nature and any suggestion to the contrary should be rejected outright". 

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