The judicial commission of inquiry into the Public Investment Corporation has found that the public investment body’s transactions with the Sekunjalo Group of companies of Dr Iqbal Survé disregarded its own policies and standard operating procedures.
"From the outset, it appears that the PIC’s interactions with and investments in the Sekunjalo Group were questionable," the 995-page report reads.
The report states that according to evidence before the commission, Matjila "negotiated parallel" to the work of the PIC’s deal team, and dealt directly with Sekunjalo chairperson, Survé.
President Cyril Ramaphosa released the much-anticipated report on Thursday afternoon.
AYO investment 'manipulated'
The PIC invested R4.3 billion for a 29% stake in AYO Technology in 2017, at R43 a share. This was based on a valuation of AYO at R13 billion when in fact the company had total assets worth only R292 million.
Survé is found to have manipulated the valuation of AYO "outright" and the report notes that the transactions were discussed between former PIC CEO Dan Matjila and Survé directly.
The Commission, which was headed by retired Judge Lex Mpati together with Gill Marcus and Emanuel Lediga, also focused on other investments the PIC made in the Sekunjalo group.
This included a R339.3-million private placement for 29% in Premier Fishing ahead of its listing on the Johannesburg Stock Exchange in March 2017.
Premier Fishing was a subsidiary of African Empowerment Equity Investment (AEEI), another Survé company.
Furthermore, the Commission probed the PIC’s investment in Sekunjalo Independent Media and Independent Media, the owner of Independent newspapers, in 2013.
The failed JSE listing of Sagarmatha, Survé’s self-described "African unicorn", was also probed.
Matjila signed agreements that would have seen a debt of R1.5 billion owed by Independent’s holding companies to the PIC, discharged through the issuing of shares in Sagarmatha.
"The proposed Sagarmatha transaction epitomises the lengths to which Dr Matjila and Dr Survé were willing to go to get the deal done," the report states.
"That the transaction did not go ahead was a result of the action taken by the JSE, and notwithstanding protestations by Dr Matjila that he had decided against the investment around the same time that the JSE withdrew the listing, if it had been left to the PIC, the transaction would in all likelihood, have proceeded. Dr Matjila did not, or was unable to, provide any evidence that he communicated in writing to Dr Survé, on behalf of the PIC, that it had decided not to proceed with the transaction."
"The AYO transaction demonstrates the malfeasance of the Sekunjalo Group, the impropriety of the process and practice of the PIC as well as the gross negligence of both the CEO [Matjila] and CFO [Matshepo More]," the commission found.
"By both omission and commission, the two most senior executive directors of the PIC demonstrated not only their lack of credibility as witnesses, but their readiness to distance themselves from decisions taken and blame others, including the most junior staff members involved in the transaction."
The report recommends sweeping forensic investigations into the financial affairs of the Sekunjalo group and an extensive investigation by the PIC board into the violations of its own policies.
It further recommends an investigation by regulators and other authorities to determine if any laws were broken.
This is a developing story.