PIC commission – Matjila acted improperly in Ayo deal

Dan Matjila, the embattled former chief executive of the Public Investment Corporation (PIC) has been found by the Mpati commission, chaired by retired judge Lex Mapti, to have lied under oath regarding the fund manager’s billion-rand investment in Ayo Technology. 

The PIC commission was appointed by President Cyril Ramaphosa in January last year to investigate alleged impropriety at the body. The fund manager is the largest asset manager in Africa, managing more than R2,2-trillion in assets, the majority of which are government pensions.

Ayo is one of the five companies in the Sekunjalo Group that Iqbal Survé chaired that were investigated by the PIC commission for dodgy dealings with the fund manager. 

Both Matjila and Survé testified at the Mpati commission that the PIC’s R4,3-billion investment in the technology company was above board and that the state-owned fund manager followed all investment policies of the PIC. 

The Mpati commission, however, found that not only was Matjila dishonest about his involvement in the transaction, but that he played a personal role in ensuring that the transaction was approved by the PIC’s deal team. 


In October 2017, Survé presented the opportunity for the PIC to invest in Ayo to then chief executive Matjila while shopping around for money to fund the company’s intended listing on the JSE. Matjila told the commission that he informed Survé that he did not get involved in the analysis of investment of potential opportunities at the PIC. He then instructed the PIC’s former head of listed investments, Fidelis Madavo, to look into the opportunity and assess its investment potential. 

As Ayo was scheduled to list on 15 December 2017, the Mpati commission found that the deal was rushed. It further found that there was material evidence of “non disclosure of all reporting memoranda given to the [PIC] board, the Government Employees Pension Fund (GEPF) and Parliament’s standing committee on public accounts regarding the approval of the deal”. 

In 2017, the PIC subscribed to 99.8 million shares in Ayo at a price of R4.3-billion, or R43.00 per share. The Mpati commission found that this amount was grossly overvalued as there was no proper valuation to back the investment and therefore “the question remains as to whether the PIC subscribed for the shares at a fair and reasonable value”. 

“At the listing date, the shares were R43 per share, while as at 23 October 2019 the share price was R5.60 per share, a decrease in value per share of 87%.”

It said the approval of the suspicious deal was done in two ways; first, when the PIC’s former assistant portfolio manager, Victor Seanie, instructed the company’s environmental, social and governance committee, and its risk and legal committees, to proceed with the transaction without the approval of the portfolio management committee. Second, when Matjila signed Ayo’s irrevocable subscription agreement before the deal had been approved by the second portfolio management committee. 

The irrevocable commitment to have PIC purchase 92% of Ayo was signed by Matjila on December 4 2017, 10 days before Ayo was scheduled to be listed. Matjila failed to reveal this to the second portfolio management committee meeting which was held on December 20 that year. 

“Even after ‘ratification’, Dr Matjila failed to give full and frank disclosures on the process followed to approve the deal,” the commission found. 

Ayo’s shares have plunged to R9 since the signing of the deal, meaning that the PIC’s investment has lost R3-billion in value. 

Matjila defended the PIC’s investment in the technology company at the commission, saying that he still believed that there was value in the company despite the losses made by the fund manager. 

Matjila said that the valuation of Ayo’s shares had been recommended by his team of “professionals” at the PIC and that he approved of the deal because he trusted their expertise.

This justification by Matjila for investing in Ayo was rejected by the commission, with the commissioners going as far as saying that Matjila lied about his involvement in the transaction and that he acted without integrity, thereby contravening the Financial Advisory and Intermediary Services Act. 

“He vacillated in relation to what authority he had been acting on when he signed the Ayo irrevocable subscription form. And there is no record of any other IPOs [initial public offerings] subscribed for in the manner he opted for in respect of the Ayo transaction, ie, without prior PMC approval,” the report reads. 

In another explosive finding, the commission said that PSG capital, which was the transactional adviser and sponsor for Ayo’s listing, received a “generous” bonus of R4-million from Survé for Ayo’s successful listing. 

Both Seanie and Matjila are no longer employed at the PIC. Seanie was dismissed in October last year after a disciplinary hearing following his involvement in the Ayo transaction. 

The report found that “the close relationship” between Matjila and Survé “created top-down pressures that the deal teams experienced to get the requisite approvals”. 

Matjila resigned in November 2018 following an internal investigation into his conduct. 

Despite the damning findings, the commission found that no PIC director or employee unduly benefited from the dodgy transaction.

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

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