The Public Investment Corporation (PIC) has described UDM leader Bantu Holomisa’s allegations of industrial-scale looting at Africa’s largest fund manager as “contemptuous”.
The company, which has about R3.5-trillion in assets under management, on Wednesday broke its silence on allegations made by Holomisa last week that the firm had regressed on governance and called for a fresh commission of inquiry to investigate his allegations.
PIC chair David Masondo, who doubles as deputy finance minister, said the state-owned asset manager would take President Cyril Ramaphosa and MPs into confidence and dispel Holomisa’s allegations.
He said the multimillion-rand payment made to one of its partners in Lanseria, Acapulco, stemmed from a legal outcome instead of looting, as suggested by Holomisa.
“Specifically, the PIC’s investment in Lanseria Holdings appears to be the primary focus of the misinformed claims by these parties,” Masondo said in a statement.
The PIC asserts that all actions undertaken in this transaction, dating back to 2013, were strictly in accordance with the exhaustive legal agreements governing the transaction and were executed with utmost diligence and adherence to due process, he said.
“Malicious claims of an unpaid loan due to the PIC are unfounded, as the outstanding loan principal and accrued interest were fully factored into, and deducted from, the final settlement amount in terms of an arbitration award that is legally binding on the PIC.”
Business Day reported on Wednesday that Acapulco, the BEE partner of Lanseria Airport, was last month paid more than R400m after the PIC was ordered to do so following a protracted legal process that culminated in arbitration.
Acapulco in 2013 received a R333.2m loan from the PIC to buy a 25% stake in Lanseria.
Under the terms of the deal, Acapulco was expected to use reasonable commercial endeavours during the term to raise funds to refinance a portion of the capital loan amount.
The final repayment of the capital loan amount was to be made on the 10th anniversary of the first advance date, which came in the latter part of 2023.
Acapulco defaulted on the loan, which had ballooned to about R600m, including interest. The PIC then moved to perfect its security by taking transfer of Acapulco’s shares in Lanseria.
The issue of the valuation of the stake then came into play. The PIC and Acapulco hired professional services firm BDO to conduct the valuation.
Both parties rejected BDO’s draft valuation, with the firm’s mandate terminated in October 2024.
A month later, the parties appointed Crowe to conduct the valuation. Crowe in January produced its final report, which the PIC disagreed with. Crowe’s valuation was an outlier in that it was far removed from historical valuations of the asset.
The PIC views Crowe’s valuation as an about R1.7bn inflation of Lanseria’s value.
The essence of Crowe’s valuation put Acapulco’s stake in Lanseria at about R1bn, opening the door for the company to walk away with a tidy sum, despite losing its shares to the PIC over the R600m debt.
Acapulco is owned by Kagiso Matjila, Sello Motau and Nozala Investments. Matjila is the son of erstwhile director-general of international relations Jerry Matjila.
The Crowe valuation, which essentially valued Lanseria at R4bn, is a big leap from the R1.4bn at which the business was valued in March — a valuation that would have valued Acapulco’s stake at about R350m.
The PIC contended that the Crowe report contained fundamental errors, most glaringly in the form of double counting. Legal opinion sought by the PIC advised the company to honour the arbitration award.
Cracks have begun to emerge in Holomisa’s allegations, having falsely accused Harith, an investor in Lanseria, of having participated in the looting he alleges. Harith was not party to the dispute between its fellow shareholders, PIC and Acapulco.
Public Interest SA, a nonprofit organisation dedicated to promoting transparency and ethical governance, has also taken Holomisa to task over his handling of the allegation against the PIC.
“It is particularly troubling that Holomisa chose to single out specific individuals by name, some of whom have previously litigated successfully against him. This choice raises concerns that his intervention may be informed as much by personal animus as by genuine concern for governance,” Public Interest said.
“Public discourse about institutions as vital as the PIC must remain measured, fair and evidence-based, lest political actors be seen to weaponise their platforms to settle old scores under the guise of accountability.”
The Lanseria deal that Holomisa refers to includes Harith General Partners, linked to Tshepo Mahloele, who is no stranger to Holomisa’s allegations.
In 2018 Holomisa, in similar fashion, made allegations of wrongdoing against Harith, Lebashe Investments, Mahloele and his business partners Jabu Moleketi and Warren Wheatley of looting the PIC in their business dealings with Africa’s largest fund manager.
However, Holomisa failed to prove the allegations, with the matter going all the way to the Constitutional Court, which tore into his claims.
“The applicants were not entitled to wantonly defame the respondents under the pretext that they were executing a constitutional duty. In the same breath, in my opinion, it was not for the public benefit to publish the unverified defamatory information,” the country’s apex court ruled in a unanimous judgment in September 2022.
“When a public figure plainly defames members of the public while admitting that he or she does not know the truth of what he or she says, his or her right to freedom of expression may justifiably be limited. In the premises, the applicants failed to discharge the onus that rested on them to lay a basis for the defence that the allegations were true and in the public interest.”
This judgment was followed by an investigation into Harith General Partners, which found no evidence of wrongdoing in allegations that it fleeced the PIC.
The investigation, conducted on behalf of the PIC and its biggest client, the Government Employee Pension Fund (GEPF), by Nexus Forensics, arose from a recommendation by the Mpati commission, which probed allegations that the PIC had been reckless in some of its investment decisions.
The PIC board last month placed its chief investment officer, Kabelo Rikhotso, on precautionary suspension after a damning whistleblower report alleged wrongdoing against him.
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