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Holomisa wants closer scrutiny of the PIC's unlisted portfolio

Mar 20 2019 13:47
Sibongile Khumalo

Leader of the United Democratic Front, Bantu Holomisa, has questioned the Public Investment Corporation's funding of companies that are linked to its former directors, calling for closer scrutiny of the corporation’s unlisted portfolio.

Holomisa, who has spoken out about alleged corruption at the state-owned asset manager, was giving evidence on Wednesday before the judicial commission of inquiry into the PIC. 

He said investments in unlisted entities should be suspended until the inquiry publishes its final report. 

Some of the PIC’s controversial investments in unlisted entities included a 25% stake in the VBS Mutual Bank, and the funding of Lancaster, an empowerment entity that bought shares in Steinhoff.

In 2016, the PIC loaned R9.35bn to Lancaster, in a deal that led to massive financial losses for the Government Employees Pension Fund, following the accounting scandal that caused Steinhoff's share price to plunge.

Holomisa also urged the commission to look into the funding of companies that have links with former directors of the corporation, a practice he said raised questions of a conflict of interest.

"There also seems to be a network of select individuals who have easy access to the PIC resources," he said. 

He noted the funding of Lebashe Investment Group, which has former deputy finance minister Jabu Moleketi as one of its non-executive directors. 

Moleketi is a former PIC chairperson.

According to Holomisa, Lebashe acquired funding from the PIC which was used to finance its expansion.

Holomisa’s allegations of untoward conduct by Lebashe and Harith General Partners last year saw him being hauled before the court.

In July 2018, the High Court in Pretoria issued an order against Holomisa to stop making or repeating corruption allegations against Lebashe or its directors, following an application by the entities.

Holomisa said that President Cyril Ramaphosa should consider extending the deadline for the inquiry to submit its final report. He said four months was not sufficient to uncover the issues at the PIC, which he described as being "in ICU".

The inquiry, which started its work late in January, is expected to submit its final report no later than April 15.

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