Businessman denies ex-PIC boss forced merger in Tosaco deal

Sakhumnotho chairperson Sipho Mseleku has rejected evidence that former PIC boss Dan Matjila imposed a partnership between the company and another entity in a Total SA empowerment transaction in 2015.

Mseleku was testifying on Monday before the judicial commission of inquiry into the Public Investment Corporation. The commission is investigating allegations of wrongdoing at the PIC, which manages R2.2trn in investments on behalf of public servants.

In March, Lawrence Mulaudzi, a director of Kilimanjaro Capital (KiliCap), told the inquiry that his venture was instructed by former CEO Dan Matjila to partner with Mseleku’s Sakhumnotho in the deal.

'Courtesy' Engagement

The companies were vying for the purchase of a 91.8% stake in Tosaco Energy, Total South Africa’s black economic empowerment partner. The consortium received R1.7bn from the PIC for the stake.

In his testimony on Monday, Mseleku said he attended a meeting, which took place in a PIC boardroom, where Matjila introduced him to Mulaudzi, in what he described as a “courtesy” engagement.

Assistant Commissioner Gill Marcus quizzed Mseleku if he did not find it odd to be introduced to a competitor in that manner and whether he realised he was being given a message.

“I did not take it that way …. at the time I did not think it was,” he said, adding that it was a short meeting.

“A short meeting with consequence,” Marcus continued.

'Win win'

Mseleku told the commission that the encounter with Matjila took place without the presence of any other PIC officials. Mseleku insisted that the decision to present a joint bid was a "mutual agreement" between both parties, saying Mulaudzi's insinuation that KiliCap was forced to merge with Sakhumnotho goes against their integrity.

“The reason for us to merge the two consortiums was so that we can have a win-win situation and to increase both our chances of success,” he said. 

Mseleku further stated that it was unclear how Sakhumnotho could have been imposed on KiliCap, as the transaction came through its corporate advisors, stressing it was a “mutual business decision” not influenced by Matjila.

No influence

“It was a joint business decision that we took at the time without influence,” said Mseleku.

Mseleku also sought to clear the matter of R100m transaction fees which was shared equally by the companies, which at 5.8% of the transaction has been described by a previous witness as higher than the industry norm. 

According to Mseleku, the fees were solely negotiated by Mulaudzi and “it was not easy to determine whether the transaction fees were abnormal or excessive”.

The inquiry is expected to submit its final report to President Cyril Ramaphosa by July 31.

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