Have the PIC and GEPF abandoned litigation against Sekunjalo Independent Media and AYO?
4 May 2021
On 2 Dec 2020, the Public investment Corporation (PIC) appeared before the Parliament’s Standing Committee on Finance (SCOF) and gave an express undertaking to implement the recommendations of the Mpati Commission which had delivered a damning report on the conduct of Iqbal Survé and Daniel Matjila. Not much has been heard in this regard since then.
The collaboration between Survé and Matjila has left the Government Employee Pension Fund (GEPF) facing the almost certain loss of more than six billion rand through the PIC’s investments in Sekunjalo Independent Media and AYO Technology Solutions.
Since then, the tactics of delay and prevarication have become increasingly obvious.
More than two years ago in November 2018, Finance Minister Tito Mboweni, in response to a question in parliament from the Democratic Alliance, revealed that Iqbal Survé had not repaid the due amount on a loan of more than half a billion rand made by the PIC in 2013 to buy the Independent Media newspapers. With accrued interest, the amount owed on that loan now exceeds a billion rand.
On 17 February 2019, three months after this acknowledgment by Mboweni, a Sunday Times headline read ‘How Iqbal Survé splurged R140m on luxury apartments while PIC wrote off R1bn loan’. Since then that process has probably accelerated.
Five months after Mboweni’s announcement – on 3 April 2019 - Iqbal Survé, to the dismay and anger of almost two million government employees and GEPF pensioners, acknowledged to the Mpati Commission that he was still making no effort to repay the due amount on the PIC loan but was nevertheless servicing the loans of his Chinese funders.
There was no response from the PIC to this disturbing under-oath manifestation of Survé’s contempt for the wellbeing of the country’s government workers.
Two years ago, on 29 May 2019, the PIC lodged summons in the Cape High Court to recoup the R4, 3 billion invested in AYO Technology Solutions. The shares for which Daniel Matjila had seen fit to pay R43 each are now trading on the Johannesburg Stock Exchange (JSE) for less than R10 each which means that the State’s employees and pensioners will never see a return on what could perhaps be justifiably described as ‘Matjila’s folly’.
Then, in October 2019, the chairman of the PIC, Dr Reuel Khoza, stated that, in order to safeguard government pensions, it would be necessary to liquidate Sekunjalo Independent Media. A month later the state asset manager applied to the Cape High Court to liquidate Sekunjalo Independent Media saying that it was technically insolvent and unable to meet its financial obligations.
Since then, nothing further has been heard about these two court cases and when court dates were sought by the Democratic Alliance and journalists, the PIC refused to supply the information. We again ask WHY?
AMAGP in its Statement No 7/21 referred to the secrecy prevailing about the
Independent Media and AYO matters and almost begged the concerned authorities to provide clarity about the litigation that had been initiated Let us again name those authorities: The Government, the PIC and the Board of Trustees of the GEPF. We went so far as suggesting that things were being swept under the carpet. As usual the reaction was an alarming silence which tends to confirm our worst fears.
AYO Technologies Solutions (AYO) has not been as secretive about its deal with the PIC. In a statement by them on 30 April 2021 we find the following interesting information:
AYO further said it was in the process of appointing an independent legal expert, to review the report of the Mpati Commission of Inquiry, to assess the findings in relation to AYO and where necessary make recommendations to AYO. (WHY?)
‘Such appointee will be a retired judge and/or retired senior advocate, that has no current or previous links with AYO, has not been employed by AYO, nor has any other direct or indirect connection to AYO. AYO and its Board will extend the appointed legal expert full access to all AYO documentation leading up to the investment by the Public Investment Corporation (PIC) including all emails, correspondence, Board meetings minutes, and any other relevant records.’
So, AYO is appointing a commission of inquiry - terms of reference included - to investigate AYO which will report to AYO.
Quis custodiet ipsos custodes?
‘The company said it would also escalate the mediation process with the PIC to reach an amicable solution and develop a positive investor-investee relationship with the asset manager.
‘AYO has already engaged in a mediation process with the PIC as AYO is of the view that a protracted legal dispute is not in the interest of the PIC, AYO or its employees. Management will endeavour to accelerate this engagement in an effort to reach a speedy and amicable resolution.’
‘Already engaged in a mediation process?’ Thank you AYO for letting workers and pensioners know what is happening with their money!
Is the cat now out of the bag? Is this why we hear nothing about progress in the courts?
Issued by Adamus Stemmet, Spokesman, AMAGP, 4 May 2021