Sekunjalo liquidation 'logical' to help protect state pensions - PIC interim chair | Fin24
 
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Sekunjalo liquidation 'logical' to help protect state pensions - PIC interim chair

Oct 20 2019 16:57
Compiled by Carin Smith

Concerns that businessman Iqbal Survé's Sekunjalo Holdings could be moving assets offshore, is one of the reasons why the Public Investment Corporation (PIC) believes it would be a logical step to have the company (Sekunjalo) liquidated, PIC interim chair Reuel Khoza tells Business Times.

Sekunjalo has denied this, claiming Sekunjalo is "cash positive", and threatened to take legal action against the PIC.

Yet, the PIC has reached out to law enforcement authorities and the SA Reserve Bank, which controls the flow of money into and out of SA. As the government-owned asset manager, the PIC invests government employees' pensions as well as unemployment insurance funds.

Khoza believes liquidating Sekunjalo would help to protect civil servants' state pensions by preventing it from being "frittered away".

PIC acting head of legal services Lindiwe Dlamini told MPs on Tuesday that the state-run asset manager is considering submitting an application to liquidate Sekunjalo. The PIC claims Sekunjalo owes it more than R1bn in loan repayments.

According to the PIC, it provided Sekunjalo Independent Media (SIM) with the loan in 2013 to help it (Sekunjalo) - as part of a consortium - to buy out Independent Media from its previous Irish owners, Fin24 previously reported. Independent Media publishes newspaper titles including the Star, the Cape Times and I'solezwe lesiXhosa.

Furthermore, the PIC is attempting to recoup R4.3bn it invested in Sekunjalo's listed sister company AYO Technology Solutions.

The PIC recently faced an inquiry into its affairs and Khoza told Fin24 its reputation can still be repaired. He believes allegations of governance failures detailed during the commission of inquiry shows the importance of having adequate checks and balances in state-owned entities.

He said that since taking over, the interim board has been immersed in stabilising the operational affairs of the company, which include filling key executive positions such as that of CEO, chief operating officer and chief risk officer. The PIC has been without a permanent CEO since Dan Matjila's resignation in November.

Khoza likened the PIC, which manages around R2.1trn on behalf of government employees, to a "sovereign fund" – saying it would require a CEO with a highest level of competency and ethical conduct.

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