The institution has a culture of intimidation and coercion and the people who write investment reports often have no control of the valuations and recommendations contained in them, Victor Seanie, who was an assistant portfolio manager at the PIC before he was suspended last week, told a commission of inquiry on Wednesday.
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The inquiry has heard that the deal in question, in which PIC took all of Ayo Technology Solutions Ltd.'s R4.3bn ($316m) private placement of shares in December 2017, was flagged for potentially having flouted processes. This was found in a routine audit of the Pretoria-based fund manager's listed investments in May. The PIC's investment valued Ayo at R14.8bn even though its assets were estimated at R292m.
Seanie said then-Chief Executive Officer Daniel Matjila as key to signing off on the deal before the PIC's portfolio management committee had held its first meeting. That was "highly irregular," he said. Seanie was suspended last week, along with Head of Listed Investments Fidelis Madavo, after the PIC said there'd been a "blatant flouting of governance and approval processes." Seanie also named Madavo as one of the main people involved in the deal.
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Further, Seanie said Madavo had indicated in December 2017 that he wanted a favourable Ayo investment report. Ayo executives seemed assured of a favourable outcome, Seanie said.
In the past year, half of the PIC's executive committee have been suspended or resigned. This includes Matjila, who quit in November, and the executive heads of risk, legal, listed investments, information technology and the company secretary. Ayo last week released a press statement welcoming the inquiry. Matjila declined to comment when contacted by Bloomberg News because he's yet to appear before the commission.