Senior executives implicated in irregular Ayo transaction still at PIC

At least eight people have been implicated in breaching the Public Investment Corporation’s (PIC) processes in the irregular R4.3-billion investment into Ayo Technology Solutions but only two people have been suspended.

READ MORE: PIC required to recover R4.3-billion made to Ayo by March 13

This week the PIC Commission headed by retired Judge Lex Mpati heard testimony from board members and executives who could not provide clear reasons why six other senior individuals had not had any disciplinary action against them.

The head of listed investments Fidelis Madavo and assistant portfolio manager Victor Seanie were suspended in January after an internal audit interim report into the Ayo transaction found that they had blatantly flouted the governance and approval processes of the PIC.

READ MORE: PIC inquiry witness suspended by the board just before testimony

On Monday the head of internal audit Lufuno Nemaghovhani presented the commission with the final investigative report and named all the people who had breached the transaction and financial processes.

Nemaghovani said most of the processes had been breached by the transaction team which Madavo and Seanie were part of, other members in this team were the general manager for listed equities Lebogang Molebatsi and portfolio manager Sunil Varghese.

It is well known that former chief executive Dan Matjila was a central figure in the transaction particularly because he signed the subscription agreement approving the R4.3-billion investment. This was done without due diligence being completed and the requisite committee approving it.

Then chief financial officer and current acting chief executive Matshepo More signed the memo authorising that payment should be made on the transaction also before the relevant meeting. Other roleplayers included the senior manager of investment legal Winifred Setshedi and the general manager of finance Brian Mavuka.

On the night of January 22 when the board made the decision that Seanie and Madavo should be suspended board member Dudu Hlatshwayo told the commission that concerns were raised about taking such a drastic decision on the basis of findings in an interim report.

Evidence leader advocate Jannie Lubbe asked her why Seanie, the most junior person involved in the transaction, was suspended while other senior officials were not?

Hlatshwayo said some board members had questioned that as well but the response that was given was “this board must be seen to have acted on this matter”.

“I think the chairman was the one who said this is a draft report and it doesn’t mean that other individuals will not be dealt with but for now we need to suspend the two,” said Hlatshwayo.

On Monday board chair Deputy Minister Mondli Gungubele explained that Madavo and Seanie had been uncooperative in the investigation and the board had decided to put them on the precautionary suspension to protect the investigation.

“Those two, when they were suspended it was not a verdict of their guilt but the view of the board was that they were not helping the process of investigation,” Gungubele said.

According to Gungubele, the board did not institute any action against Matjila because he was no longer at the PIC when the investigation was commissioned. Although there are clear allegations against More, she had been candid and cooperative during the course of the investigation that is why she was not suspended Gungubele said.

“Somebody else could say because she is senior she should have been suspended. With hindsight, somebody could have that view, but that was not the view of the board”.

Gungubele said after receiving legal counsel on how to deal with the findings in the report the board had made a decision to not institute disciplinary action against the others while the Ayo transaction was subject to investigation by the PIC commission.

READ MORE: Politicians on the board of the PIC do not expose it to undue influence — Gungubele

The Companies and Intellectual Property Commission has since sent a compliance notice to the PIC instructing it to recover the R4.3-billion investment made into Ayo Technology.

The commission will continue on Wednesday but the identities of the witnesses expected to testify have not been released.

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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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