Surve’s suggested valuation for Sagarmatha shot down by PIC



The Public Investment Corporation (PIC) invested close to R2-billion in the Independent Media Group but it did not invest in Sagarmatha Technologies, according to the state asset manager’s former CEO, Dan Matjila.

The PIC’s investment in Independent Media, which produces major newspaper titles such as The Mercury, The Star and the Cape Times, saw it hold a 25% stake in the company.

Matjila’s testimony on Wednesday to the commission probing alleged impropriety at Africa’s largest asset manager, focused on the PIC’s transactions with companies in the Sekunjalo Group (Sagarmatha, Ayo Technologies and Independent Media Group), which have come under the spotlight in recent years.

The former chief executive said that proposals for the PIC to invest in Sagarmatha were led by Sekunjalo chairperson Iqbal Survé in November 2017. Matjila says that he learnt through the transaction team at the PIC that Sagarmatha was planning to list on the Johannesburg Stock Exchange (JSE) in January 2018.

Matjila says there were various proposals regarding the listing price of Sagarmatha, including from Survé who suggested issuing a R1 strike option to the PIC in order to bring down the average entry share price closer to the R7,06 per share, as per the valuation by the PIC’s investment team.

The suggestion by Survé was considered by the PIC but was not possible because all other potential subscribers would also have to be the same. It would also mean that the change would have to be reflected on Sagarmatha’s pre-listing statement.

“The listing was subsequently withdrawn by the JSE citing non-compliance with the Companies Act,” Matjila said.

The former chief executive told the commission that contrary to media reports, his close personal relationship with businessman Iqbal Survé did not influence the PIC’s transactions with Sekunjalo.

“Yes, there was a continuous engagement with Dr Survé and the reason for this was not because of friendship per se but because I and my colleagues were worried that the PIC was being increasingly exposed to high risk and I needed to be closely involved with major players,” he said.

Matjila said that he felt that he needed to be on the front lines of the transactions to ensure that the best interests of the PIC were continuously protected.

“Whilst the transaction team was busy with negotiations, you were also on the side having dealings with Sagarmatha,” asked the commission’s chairperson, Judge Lex Mpati.

Matjila responded by agreeing that he indeed met with the Sagamatha’s team but that he passed on the information to the PIC’s investment team.

“It was not a bilateral. I’ve always passed on information to the team. I can’t make a decision without them saying yes or no,” he said.

The commission continues. 

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Thando Maeko
Thando Maeko is an Adamela Trust business reporter at the Mail & Guardian

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