Gauteng Premier Paul Mashatile is secretly trying to raise capital abroad for an unauthorised private equity fund he started two years ago.
Although Mashatile’s office would only confirm his trip to the state of Washington ”to seek bilateral relations”, the Mail & Guardian has established that the premier and his entourage will also be meeting businesspeople in the United Arab Emirates (UAE) to promote the Gauteng Fund.
The M&G reported last month that the Gauteng Fund was established in the provincial fiscus without approval from national treasury. Gauteng has already spent R40-million on the fund to establish a project office and on travel and salaries.
Mashatile announced in his budget speech that the province would contribute a further R500-million as ”seed capital” to the fund.
The Gauteng Fund has, however, failed to attract any private investment over the past two years.
The province contracted Sandton-based private equity firm Freetel Capital to operate the fund. Freetal head Enos Banda was appointed fund manager and Abigail Puente, who is a director of Freetel Telecommunications with Banda, runs the fund’s project office. Banda was previously the head of Eskom Enterprises.
The M&G has reliably been informed that Mashatile, accompanied by Puente, Gauteng finance MEC Mandla Nkomfe, Mashatile’s advisor Mduduzi Mbada and Freetel employee Sulanji Siwale, left South Africa on Saturday to pursue potential investors in the UAE.
The Gauteng government was sent specific questions by the M&G on the appropriateness of Mashatile’s endeavours to raise foreign capital for an unauthorised fund. On receiving the questions the premier’s office only issued an official statement confirming Mashatile’s trip to America.
Mashatile’s spokesman Simon Zwane said the purpose of the trip to Washington was to attract investment and build the capacity of government.