Tshepo Mahloele: The great paradox of the PIC Commission

LONDON — In June last year, feisty politician Bantu Holomisa launched a raft of sensational allegations against a trio of leading businessmen which were immediately lapped up by the media. As a result, Holomisa finds himself on the wrong end of a libel suit. But the UDM political party president's colourful language and skilful media management has had an upside. Last October, a Commission of Inquiry was established to look into his allegations of impropriety at the R2trn Public Investment Corporation, or the PIC. And in hearings since January the commission has exposed two unexpected warts: the dictatorial management style of the PIC's now suspended chief executive Dr Dan Matjila; and likely fraud around the PIC's R4.3bn investment in Ayo, a wanna-be African tech giant promoted on vapourware. The great paradox, however, is the supposedly pillaging businessmen described by Holomisa as "hyenas" are coming through the interrogation as honest agents. Indeed, testimony heard by Judge Lex Mpati and his commissioners Gill Marcus and Chief Lediga reveals their businesses have actually generated billions in profit for State pensioners. For those in the know, this is no surprise. That includes anyone who heard my interview with the central character, Harith's founder Tshepo Mahloele. I was looking for the other side to an incredulous story shortly after Holomisa's allegations were publicised. At the PIC Commission these past two weeks, Holomisa fared poorly under cross questioning. But those he targeted – Mahloele, his chairman Jabu Moleketi and business partner Warren Wheatley – appeared voluntarily and delivered a consistent and believable version of events. Last weekend, I caught up with Mahloele at the National Portrait Gallery in London… – Alec Hogg.This is The Rational Perspective. I'm Alec Hogg, and in this episode a great paradox at the PIC Commission..___STEADY_PAYWALL___.In June last year feisty politician Bantu Holomisa launched a raft of sensational allegations against a trio of leading businessmen and those allegations were immediately lapped up by an expectant media. As a result, Holomisa finds himself on the wrong end of a libel suit that he's losing very badly but the UDM political party president's colourful language and skilful media management did have an upside..Last October a Commission of Enquiry was established to look into his allegations of impropriety at the R2trn Public Investment Corporation (PIC) and in hearing since January the Commission has exposed two unexpected warts. The dictatorial management style of the PIC's now suspended CEO, Dr Dan Matjila and likely fraud around the PIC's R4.3bn investment in AYO, a wannabe African tech giant promoted on Vapourware. The great paradox however is the supposedly pillaging businessmen, described by Holomisa as, 'hyenas' are coming through their interrogation as honest agents..Indeed, testimony heard by Judge Lex Mpati and his Commissioners, Gill Marcus and Chief Lediga in the past couple of weeks reveals that their businesses have actually generated billions in profit for state pensioners. For those in the know, all of this is no surprise and that includes anyone who heard my interview with the central character, Harith's founder, Tshepo Mahloele. I was looking for the other side to an incredulous story shortly after Holomisa's allegations were publicised and spoke with Mahloele in July last year. At the PIC Commission Holomisa has faired poorly under cross-questioning but those he targeted, Mahloele, his chairman, Jabu Moleketi, and business partner, Warren Wheatley, appeared voluntarily and then delivered a consistent and believable version of events, and one that ties up completely with what they told me last July. So, over the weekend I caught up with Mahloele at The National Portrait Gallery here in London..Tshepo Mahloele, you've had a tough week. Now, we spoke in July last year about allegations against Harith, against yourself, your business and Lebashe etc. It all came to a point at the PIC Enquiry in the last couple of weeks..Yes, in a way, Alec, I think for me, it's perhaps the moment we've been waiting for and to hopefully tell our story, in who we are, what we come from and what we've done. I'm glad that we've had the chance to do that because there's been all the insinuations made about our genesis and everything. Hopefully now, perhaps like you did last year July, people can go and read up on our story on who we are and how we came to be about and that it's not all these things that we've been made out..Yes, it's extraordinary. You told the story last July to me. We sat down in your offices. Now, you've spoken to a national audience. We're going to embed your statement and what went on there but from your perspective it must have been quite draining..I don't wish it upon too many people. We've been fortunate and blessed that our stakeholders, first and foremost, in the form of our investors, they know our company. They know our genesis. They are part of it and they own it..Just remind us who they are, those investors..We have the Government Employees' Pension Fund, we have Absa Bank, we have Old Mutual, and the African Development Bank, we have Metropolitan, Stanlib, all these investors had they not been close to us and part of everything that we do and part of our governance within the PIDF-1 and 2, I don't think we'd have been able to get through this as we did. So, in a sense we've been blessed that our stakeholders are close to us and maybe going forward, that type of relationship is what matters. The people who own the capital are the ones who know the most of what is happening so, therefore, that has really been our mainstay in terms of the ability to get through this. It seems like too long what we've been going through. It's since last year, June. It's a lot of time spent trying to get people to read up on your stuff..Are you any closer to the reason why Bantu Holomisa decided to make these attacks? He called you guys hyenas. He hasn't been able to prove anything and in fact, it at least gave you the opportunity to tell your story. But have you got any closer to his motivations?.Alec, for me it still remains a mystery. I've got many theories I could think about why he's doing this. Unlike him, I will not speculate or make assumptions without proof. But the one definite thing I know he does get is airtime and perhaps political mileage in a very noisy SA environment. Good and well, we must deal with corruption but we can't deal with it at the expense of well-functioning companies, which must be sustainable, and in an environment that jobs must be protected. We cannot sacrifice those things at the altar of political expediency for a political organisation. So, the other reasons I cannot prove them so, I won't say it until I know it as a fact..But you are going to court. You're still suing him for deformation?.Alec, that process will go onto its logical end and if you remember, we were successful in terms of being able to get the interdict. He appealed. We've had three court dates, which have not been accepted by his side. We have continued to issue 'Summons for Defamation' and however long that takes us it's important that we disprove, ensure, and perhaps not have this happen to another company in the manner that we were attacked..So, there were insinuations that you and Dr Dan, who seems to be under something of a cloud now that you were very close and that in fact, you were favoured by the PIC?.Alec, that's exactly the whole issue. The whole existence of Harith fund managers is true and wholly accountable to the investors. They invested in it. PIC did not invest in the PIDF. They sit on our governance committees. Harith is like privately owned also, alongside Harith fund managers, Old Mutual and Absa. Therefore, on the investment side there's no connection..So, there's no connection?.No, not at any point within those processes or those investments, let alone Dr Dan, that the PIC is involved in or have any influence. So, proximity there does not even count. We have been funded in one transaction, which we've always had, the capital transaction. Besides that, we have not been funded for anything else. More so, it has performed spectacularly for the GEPF funds so, all the other things we've done are totally unfounded. So, therefore, I hope people can now see that this proximity is totally non-existent. Of the 120 or so investments they have in the unlisted portfolio we are only one of them and we are less than one percent. We are 0.95% of the R147bn that they've funded. Therefore, that issue does not arise at all..You said earlier that you're going to sue Holomisa for defamation and you're going to continue until the last result. What if he sees and unpacks things now and he has more information and says, he's sorry, he made a mistake. He didn't mean it or he now appreciates that he was maybe misinformed..Alec, for me, as I said, the main show is the businesses we invest in, the investments that we run, that's the main show. To the extent that he can come and do it as publicly as he had done the defamation, perhaps I'm willing to listen but other than that, we have to take the defamation action to its logical conclusion and also, we've spent a lot of money defending ourselves and defending the company. We have many people who work in the underlying investments that we have invested in. For them to continue to defend those platforms has not been an easy task. It's been a really expensive situation..Now, your investments are into the Continent and in SA as well, but particularly the Infrastructure fund, it's 100's of millions of Dollars that you've invested there. What has the feedback been like from those people who are investing in those funds or your partners on the Continent?.The sad thing is now in most instances when we get into a meeting you start explaining, 'guys, you know what – there's not this nor that.' So, that has been good. We are close to our partners. We have funded alongside some of the large investors across the Continent, like International Development Finance Institution, German ones, Finnish ones, the IFC, the African Development Bank, so those are some of our partners in those projects and we've needed to just do what we could do under the circumstances. To continuously give them assurance that you guys know our composition and some of us before you even invest in those projects there's always lots of due diligence done on all partners. So, we have been perhaps, I will say again, blessed that we are close to some of those partners but we've needed to spend an inordinate amount of time. Now, speaking to regulators in the UK, saying to them that there's nothing here because we also operate out of our jurisdiction, or in Mauritius. So far, touch wood, we've been able to keep them onboard but you can imagine the amount of time it has taken to do all that. As opposed to us growing our company, investing, and impacting positively as we have done for the past 14-years across the Continent..So, what's next?.For us, we hope to finish telling our story in the next week but we have to go on with our business. We have to go on with our lives. We have to continue investing. We have to continue growing on the Continent, and that's what we're going to do. We are going to continue growing our private platform and to leave that positive legacy. But on the side of the defamation case – that will go on. But our main show is continuing to make this positive development and we hope that we can one day just do triple and quadruple what we've done up to now, on the Continent..Just to close off with, some good news in the last week from one of your big investments in EOH. This, I hope, was not unexpected although, you're still a little underwater there..Look, we're still a little bit underwater but Alec, I think I also told you last year that for us, we're taking the long-term view. We've always maintained that some parts of that group, there's a lot in there and we always believe that a reorganisation of it will be good. We thought that we had gotten in at the bottom but we always learn, all the time, there was even a deeper bottom than that but we're glad that now, it's coming back. We want to believe that the new CEO, Stephen, is now communicating that to the market. He's now acting on it and also, the management structure has been redone and there's also the board, the board has been strengthened. Again, as I've said, perhaps it's my infrastructure side of things that says, we'll always try and play the long game. Sometimes we get it right and sometimes we get it wrong but most of the time when we get it positive then the numbers stay positive. So, that's the way we look at it..That was Tshepo Mahloele, founder and CEO of Harith and Lebashe. This has been The Rational Perspective. Until the next time, cheerio.

Tshepo Mahloele: The great paradox of the PIC Commission

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