UDM calls on Ramaphosa to tackle ‘iceberg of corruption’ at PIC

The United Democratic Movement (UDM) has called on President Cyril Ramaphosa to address what it calls an “iceberg of corruption” at the Public Investment Corporation (PIC), claiming it has uncovered the involvement of several individuals and companies in the pillaging of the institution.

The PIC is a state-owned company tasked with managing nearly R2-trillion in assets, more than 98% of which belongs to the government or its employees. This includes the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund (UIF) and Compensation Fund.

The PIC and its chief executive, Dan Matjila, have been wracked by allegations of impropriety in recent weeks. The company’s investment in Ayo Technology Solutions saw it purchase 29% of a company with assets whose actual worth was R4.4-million, but which was valued at triple that according to the purchase price. This move has been under investigation.

It also invested in the controversial VBS Mutual Bank.

With more than 87% of its assets belonging to the GEPF, government employees’ retirement funds will bear the brunt of any losses made by the PIC.

New24 has seen the UDM letter, addressed to Ramaphosa, imploring him to take action against an “iceberg of corruption” at the PIC. This is a follow-up to two letters sent to the president on May 31 and June 8 this year.

The main thrust of the letter is that several companies are being used by individuals with connections at the PIC to secure funding for companies that do not qualify to do so.

“Mr president, these companies and individuals all have link/s – past and present, directly or indirectly – with the PIC. It makes for uncomfortable reading when one considers the possibility of a very complicated and opaque scheme that will put at risk the Government Employees Pension Fund.”

Central to the alleged scheme is a company by the name of Lebashe Investment Group. Its directors are Warren Wheatley, former PIC staffer Tshepo Mahloele and former deputy finance minister Jabu Moleketi.

Company records reveal that Lebashe uses the same Sandton business address given by Harith Investment Managers on its website. Mahloele and Moleketi are also the directors of Harith, in which the PIC has a 43% stake.


Lebashe had previously purchased a company founded by Wheatley, TSS Capital. Earlier this year, Lebashe increased its stake in Rainfin, a company of which Wheatley is a director, to 75%.

Rainfin holds a share of Aluwani Capital, an investment manager directed by Moleketi.

Lebashe also became a shareholder of 4 Africa Exchange, which lists Mahloele as a director, in December 2017.

“The [allegations] above read like a spy novel with incomprehensible twists and turns, with only clues as to the real nature of the relationship between these companies and Messrs Mahloele, Moleketi and Wheatley. From the above information, one can however see that there is a complicated system at work to apparently hide that the PIC is being fleeced at an astonishing pace,” reads the UDM’s letter to the president.

The UDM questions from where Lebashe received its funding to make these acquisitions, especially in light of the fact that Lebashe was previously granted a loan by the PIC.

“At face value, there seems to be a concerted effort to hide, layer within layer, the relationships between the role players and their past and present roles [in] the PIC.”

But Harith and Lebashe have come out swinging against the allegations in a statement issued on Wednesday, calling the UDM’s letter “unfounded and vexatious”.

“The motive behind the letter is for Mr (Bantu) Holomisa, at the expense of both our entities and professional reputations, to attract public attention for his own political gain. We refute the allegations in the letter which are unsubstantiated and unfounded.”

Wheatley indicated that Lebashe and the individuals named in the UDM’s letter were taking legal advice on the matter.

“Legal counsel is advising the parties in regard to various legal proceedings including laying criminal charges of crimen injuria against the UDM and Mr Holomisa personally and issuing them with a summons for defamation and damages as a result of the reputational and economic harm that the letter has caused.

“We remain committed to our commercial relationships with the PIC, Africa’s largest asset manager, particularly given that there is nothing untoward in regard to these relationships. Our transactions with the PIC are transparent, above board and subjected to the normal vigorous and robust investment processes regulated by the PIC.”

Lebashe claims that only its acquisition of a 5% stake in Capitec was funded by the PIC, and that the repayments for this loan were up to date. The rest were either funded by other financial institutions or shareholders.

“Harith and Lebashe are separate entities and have no common shareholders. We have common directors in Messrs Mahloele and Moleketi.”

The PIC had not responded to requests for comment by the time of publishing. — News24

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