PIC mulls submitting application to liquidate Survé's Sekunjalo over debt, MPs hear


The Public Investment Corporation told MPs on Tuesday that it is considering liquidating Sekunjalo, the investment holding company of businessman Iqbal Survé, over the non-repayment of a 2013 loan. 

The corporation's new chair, Reuel Khoza, and other executives were briefing the standing committee on finance on the group's financial results.

The state asset manager, which manages over R2trn on behalf of public servants, also told MPs it also intends to recoup its investments in Steinhoff, VBS Mutual bank and AYO Technology Solutions.  

Here is what you need to know: 

Independent Media

While the PIC did not on Tuesday say which loan is was referring to or name an amount, Fin24 reported in April that the state asset manager in 2013 made a loan to a consortium called Sekunjalo Independent Media, a subsidiary of Sekunjalo, to buy out Independent News & Media in Ireland.

The PIC confirmed on Tuesday that the loan in question was made in 2013. 

Survé, the chair of Sekunjalo and the head of its subsidiary Independent Media, previously told the PIC commission of inquiry that, in addition to the R850m PIC loan, the consortium received a R1bn loan from a Chinese consortium called Interacom Investment Holdings and R150m from the Sekunjalo group itself.  He told the commission that the media group had only been making interest payments to the Chinese consortium, and not to the PIC. As of April, Independent Media owed the state-run asset manager an outstanding balance of roundly R1.5bn, given the interest that has accrued on the initial investment, the commission heard.  

The PIC's acting head of legal, Lindiwe Dlamini, told the committee on Tuesday that the PIC has issued a letter of demand to Sekunjalo and that it is considering submitting a liquidation application to recover the loan. She did not provide more information. 

Sekunjalo, on Tuesday evening, disputed that it owed the PIC any money. It said the 2013 loan had been made to Sekunjalo Independent Media, a special purpose vehicle set up to acquire Independent Media, and not the investment holding company Sekunjalo. In a statement, Sekunjalo chairperson Iqbal Survé alleged Dlamini had "deliberately, and willingly misinformed Parliament".

"We demand she immediately retracts her statement and conveys the truth. In fact, the Sekunjalo Group is a creditor, like the PIC, when it comes to SIM."

PIC commission of inquiry 

Khoza told MPs the PIC board anticipates the findings of the PIC commission of inquiry will be "damning and far-reaching," adding the board is committed to restoring "sound corporate governance and public trust".

The commission, appointed by President Cyril Ramaphosa in August last year, will release its final report by the end of October. Chaired by Justice Lex Mpati, it investigated the standard of the PIC's internal governance, how it made decisions to invest and potential wrongdoing by senior executives. The inquiry heard evidence, including from Survé, over 63 days from early January 2019 to mid-August. 

In an article published on Independent-owned IOL on Sunday, meanwhile, Survé accused Minister of Public Enterprises Pravin Gordhan of trying to influence the PIC commission to make "adverse findings" against his companies. 

Gordhan has denied Surve's claims, calling them "malicious and nonsensical," while Mpati, who heads the PIC commission, said the allegations of interference have "no basis in fact".


The PIC is one of the largest investors in the scandal-hit global retailer, whose share price plunged in late 2017. The state asset manager held a 10% stake in the company. 

The corporation originally lodged a litigation process against Steinhoff in Amsterdam, where the retailer is domiciled. But after the retailer's board in April 2019 announced plans to resolve claims against it, the investment corporation opted to delay litigation and wait to see how the mediation process would play out, Dlamini said.

If the mediation process collapses or is unfruitful, however, the PIC will continue its litigation against Steinhoff, she added. Dlamini said that the PIC had engaged with the Hawks and the Financial Sector Conduct Authority on Steinhoff.

In the meantime, it will consider a delinquency application against directors representing its interests at Steinhoff.

While the PIC has also requested full access to a 3 000-page internal report compiled by PwC into Steinhoff's financials, Steinhoff has refused. The group views the report as privileged and confidential. 

For this reason, Dlamini said the PIC intends to take remedial action against people publicly known to be implicated in the saga. 

VBS Mutual Bank

The PIC was one of the major shareholders in VBS Mutual Bank. The two PIC officials nominated to represent the interests of the PIC on the VBS board - Ernest Nesane and Paul Magula - have now been declared delinquent directors by a high court after being implicated in an investigation into the collapse of the bank. The directors were also disbarred by the Financial Sector Conduct Authority, earlier this year.

The PIC has also filed a liquidation claim with the liquidators of the bank. "We are waiting for the finalisation of the process," Dlamini said. The asset manager said it is also considering "other avenues" for adequate consequence management and this includes civil liabilities against affected parties, she added.

AYO Technology Solutions

The PIC made a R4.3bn investment in AYO Technology Solutions in December 2017, shortly before the IT company listed on the JSE. But commission of inquiry into the PIC heard evidence there may have been major misrepresentations AYO's share value at the time the PIC made the investment.

The corporation has lodged a civil claim to recover the R4.3bn over what it views as misrepresentations, as well as the flouting of policy processes by PIC employees, including its former CEO Dan Matjila. AYO, meanwhile, is opposing the claim. In April the IT group complained of "being tried in the media [and] found guilty before being proven innocent", saying there was nothing wrong in its submitted unaudited financials. 

Dlamini told MPs on Tuesday the corporation is also considering an anti-dissipation order to freeze AYO's assets, as it is suspected they might be moved offshore. The PIC has contacted the Financial Intelligence Centre and the SA Reserve Bank for assistance.

Last week, meanwhile, the Financial Sector Conduct Authority raided Sekunjalo's offices in Cape Town, part of a market manipulation probe which may be related to AYO. 

Survé, in response, described the raid as a "tactic designed to focus yet more negative attention on companies that I am associated to".

"I firmly believe that what transpired today is a concerted and organised effort to personally discredit me and undermine the organisations in which I have a vested interest, in an effort to ‘control’ me and the reporting that is carried out through Independent Media of which, I am chairman".

He says the Sekunjalo group is planning the sue the FSCA. The authority, meanwhile, says it will oppose any legal action. 

- Additional reporting by Jan Cronje and Helena Wasserman. 

* This article has been updated to include comment from Sekunjalo. The article has also been changed to make clear that the 2013 PIC loan was to Sekunjalo Independent Media, a special purpose vehicle setup to buy out Independent Media from its Irish owners. 

* This article has been updated to clarity that while the PIC did not on Tuesday say which loan it was referring to, the PIC commission of inquiry heard in April that the asset manager had made a R850m loan to Sekunjalo Independent Media in 2013.  

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