Revealed: PIC lent R1bn to Iqbal Surve – here’s full list of beneficiaries.

The Public Investment Corporation (PIC), the South African government’s asset manager which is the retirement funds custodian for all public sector employees, lent more than R1bn to Iqbal Surve’s struggling Independent Media Group. The PIC reluctantly revealed this information after instructed to do so by Parliament. The detailed breakdown of its “investments” – many of which have been channelled to politically influential persons – is embedded in the article below. It makes disturbing reading for public sector retirees. The loan to Surve provided the cash for him to acquire the newspaper group at a price that is double what any other bidder was prepared to pay. It is justified by the PIC as it facilitated black ownership of the country’s print media – reasoning which falls way outside the PIC’s investment mandate. When explaining the rationale for the deal, the PIC described Independent as a large company that owns some of the most trusted titles. But few will believe that these are the real reasons the PIC has provided financial backing to the group. For starters, there has been a stark deterioration in the quality of the journalism across Independent titles and a purge of senior journalists who stood their ground against management over editorial independence. More importantly, the ruling ANC has moved to take control of the messaging across the media industry, starting with the national broadcaster – the SABC, where buffoonish Zuma ally Hlaudi Motsoeneng has had a firm hand on the tiller. The Gupta family, also close associates of President Jacob Zuma and in the limelight in connection with not far off R7bn in questionable financial transactions, controls through Oakbay Investments The New Age newspaper and ANN7 outlets. Surve, who falsely claims to have been a struggle doctor who nursed none other than Nelson Mandela, was undoubtedly seen as an ally in the ANC campaign when the PIC opened the money tap. Surve was in India at the weekend at a Brazil, Russia, India, China, South Africa conference – also attended by Zuma who appointed him as one of the country’s five representatives onto the BRICS Business Councils. The PIC’s secrecy over its significant funding arrangements with the Independent group only adds to suspicions that decision-makers within the country’s largest asset manager are having their strings pulled by politicians instead of selecting assets based on sound investment principles. – Jackie Cameron

By Liesl Peyper

Cape Town – The Public Investment Corporation (PIC) on Tuesday disclosed details of 250 investments in its unlisted portfolio.

The PIC’s investment in this portfolio totalled R44.6m in the 2015/16 financial year.

David Maynier. Picture courtesy of Twitter @SABreakingNews
David Maynier. Picture courtesy of Twitter @SABreakingNews

Democratic Alliance MP David Maynier has for five months put pressure on the PIC to disclose the name, type, value, rate of return and the names of all directors of the companies in the unlisted portfolio.

He wanted assurance from Deputy Finance Minister Mcebisi Jonas – who is also the chairperson of the PIC – and the entity’s CEO Dan Matjila that there are no “rent seekers with political influence trying to raid the PIC” under the companies in which the PIC invests.

The PIC, which manages among others the assets of the Government Employees Pension Fund, the Unemployment Insurance Fund and the Compensation Fund, had a total of R1.8trn assets under management in the 2015/16 financial year.

It invested in unlisted companies through the Isibaya Fund – a corporate development investment fund that supports investments in the developmental sphere.

The state-owned entity has a R1.275bn investment in Independent Media Group, which is headed up by businessman and Sekunjalo Investments owner Iqbal Surve.

Iqbal Surve, head of Independent media group.
Iqbal Surve, head of Independent media group.

The PIC’s exposure to Independent Media is as follows:

  • R166 333 000 – direct equity (25%)
  • R579 683 083  – debt loan
  • R183 000 000 – debt loan
  • R346 096 192 – debt converted to bridge finance

Isibaya detailed investment schedule

The PIC earlier couldn’t disclose the exact sum of money it has made available to Sekunjalo Independent Media, but the document showed it provided more than R1bn in the form of debt financing to Sekunjalo.

In May, the PIC defended its decision to finance Sekunjalo’s acquisition of Independent Media, saying the media group is the “largest English language newspaper publisher in South Africa that owns some of the most respected and trusted media titles in the country”.

Read also: James Myburgh: How Independent is Surve’s Independent  with R900m PIC debt

“The media industry remains largely untransformed in terms of black ownership. In participating in the acquisition of Independent Media the PIC facilitated black ownership of the print media sector.

Full PIC statement to standing committee of finance

“The PIC funded the Sekunjalo Consortium, which comprises of Sekunjalo which is an empowered listed company and other broad-based empowerment groups,” PIC’s CEO said in a response to a question from Parliament’s Standing Committee on Finance. – Fin24


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