Suspension of PIC executive did not follow normal procedure, Mpati inquiry hears

A Public Investment Corporation (PIC) executive, who was suspended this week ahead of his appearance before the commission of inquiry into impropriety at the PIC, was not given an opportunity to respond to the charges against him before his fate was sealed.

The suspension of Fidelis Madavo, the executive head of listed investment at the PIC, was announced at the PIC commission of inquiry prior to him taking the stand before former Supreme Court of Appeal president Justice Lex Mpati.

According to the PIC, Madavo was suspended together with assistant portfolio manager Victor Seanie after a preliminary report by the PIC’s internal audit team found apparent “flouting of governance and approval processes with respect to the Ayo Technology Solution transaction”.

The executive head of Human Resources, Chris Pholwane told the commission he was informed of the decision to suspend Madavo after a marathon board meeting that took place on Monday from 4pm until after 1am on Tuesday.

Pholwane said he was invited to attend the board meeting “sometime last week”. At this meeting discussions covered the disciplinary hearings of other PIC senior staff members as well maMadavo and Seanie’s suspension.


Pholwane said he had recused himself from the meeting after it began, and he was called back in the early hours of the morning at around 1.30 where he was informed that he would have to serve suspension letters to Madavo and “another employee” as part of the outcome of an internal audit report.

“I was not presented with the report,” Pholwane said.

Madavo was handed the suspension letter at 8.30am on Tuesday.

“Was procedure followed to suspend an employee? What happened last night and this morning is that the normal procedure of the PIC?” chief evidence leader advocate Jannie Lubbe asked.

“Ordinarily commissioner you would like to provide an opportunity by serving a notice and this morning obviously that was a short time,” Pholwane responded.

Customarily, an arrangement for a meeting would be made with an employee where they would be given details about the nature of the meeting and be notified that a suspension would be served. The employee is then provided with the option to make oral or written representations at that meeting or later, Pholwane explained.

“From a procedural point of view, there were some points where I felt Mr Madavo could have been given an opportunity to give reasons why he should not be suspended. I did, however, indicate that at any other stage he can do that.”

Madavo told the commission he was “not directly involved… at all” with the AYO Technology Solutions transaction because he was out of the country at the time.

The PIC invested R4.3-billion of state pensioners money into the company linked to Independent media owner Iqbal Surve, despite concerns raised about the company’s overvaluation and procedural issues.

When asked where the Ayo Technology Solutions transaction had come from, Madavo said: “[It] came from the CEOs office who would typically contact the team and say there is this opportunity”. Dan Matjila was the PIC’s chief executive officer at the time

Madavo said he was not aware of issues of impropriety within the PIC and said although there were some failures in the AYO Technology Solutions transaction he does not think there was improper conduct in the deal.

The PIC’s biggest shareholder, the Government Employees Pension Fund (GEPF), has expressed concern over the immediate suspension of the two PIC employees who have been linked to the AYO Technology Solution transaction.

“Of serious concern to the GEPF is that the PIC had assured the GEPF on numerous occasions and in correspondence that correct governance processes were followed with respect to the Ayo Technology Solutions transaction. The GEPF views this as a serious breach of trust,” the pension fund in a statement said.

GEPF has called for the PIC to quickly finalise the investigations in the Ayo Technology transaction and take appropriate action where warranted.

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Tebogo Tshwane
Tebogo Tshwane

Tebogo Tshwane is an Adamela Trust financial journalism trainee at the Mail & Guardian. She was previously a general news intern at Eyewitness News and a current affairs show presenter at the Voice of Wits FM. Tshwane is passionate about socioeconomic issues and understanding how macroeconomic activities affect ordinary people. She holds a journalism honours degree from Wits University. 

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