Sagarmatha listing push linked to Survé’s ego, PIC commission hears

What has been previously described as a ‘desperate’ attempt to have the Public Investment Corporation (PIC) invest R3-billion in Sagarmatha Technologies was to spare businessman Iqbal Survé the humiliation of the deal not being successful, the PIC commission heard on Monday.

Sagarmatha had approached the PIC for funding on December 21 2017, the same day that Ayo Technology Solutions listed on the Johannesburg Stock Exchange (JSE) with a R4.3-billion investment from the PIC.

READ MORE: Sagarmatha offered PIC cut-price deal, inquiry hears

The PIC is now working on recovering the money it paid to Ayo after an internal audit report found that approval and governance processes were not followed in a deal approved by former chief executive Dan Matjila without consulting the approval committee.

Both Ayo and Sagarmatha are associates of the Sekunjalo group which is ultimately controlled by Survé through a family trust.

When the PIC would not pay the initial asking price brought by Sagarmatha because it was too steep, Matjila returned with a side offer not disclosed to the transaction committee that would see the PIC buy more shares in the company for nearly 80% less than other subscribers on the same day that it made its debut on the JSE.

READ MORE: How PIC officials managed ‘forced’ exposure to Survé deals

When asked by PIC commission assistant Gil Marcus if Matjila was essentially willing to pay any price for the Sagarmatha shares as long as the transaction totalled R3-billion, portfolio manager for listed equities Sunil Varghese said: “In my humble opinion, there was an urgency by the company itself to make this listing successful because they had irrevocables from ambassadors, Russian tycoons and other influential families in South Africa.

“Perhaps Mr Survé wanted to save his face and make that listing happen because he promised them a dream of building the next big ecommerce company in Africa”.

Sagarmatha initially approached the PIC with an asking price of R39.62 a share to “build a pan-African media and e-commerce company” on the JSE which would later list on the Nasdaq — an American stock exchange.

Varghese told the commission — chaired by Judge Lex Mpati — that the investment team believed that Sagarmatha’s listing price was too high and recommended that the PIC should subscribe at a price of R7.06.

“That was our intrinsic value. [Matjila] was pro the deal and our valuation indicated otherwise so it was a diplomatic way of saying ‘no’,” Varghese added.

Although the PIC’s approval committee agreed to buy shares at R7.06 or below, Matjila told the team to prepare another submission to the committee to subscribe to shares worth R3-billion at an average cost of R8.50 if the PIC exercised its strike call option and bought more shares at R1.

Matjila is said to have reluctantly agreed when the team again said that R8.50 was still too high and promised to engage Sekenjalo.

READ MORE: Sagarmatha, Survé’s perilous peak

However, just over a day later, the JSE cancelled Sagarmatha’s listing because it had not complied with certain listing requirements.

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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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