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Top PIC executive suspended over AYO Technology Solutions investment

Jan 22 2019 10:43
Sibongile Khumalo, Fin24

The Head of Listed Investments at state asset manager the Public Investment Corporation, Fidelis Madavo, has been suspended following a probe into the corporation's controversial investment in AYO Technology Solutions. 

The commission of inquiry, which is probing governance and investment at the corporation, learnt of Madavo's suspension on Tuesday morning.

The PIC controversially decided to underwrite AYO’s entire private share placement before its listing in late 2017 with a R4.3bn injection, despite internal concerns that it was overvalued.

In a separate statement the PIC said on Tuesday morning that its preliminary report into the AYO investment "clearly reflects a blatant flouting of governance and approval processes of the PIC". 

"Employees of the PIC have also been implicated in these irregularities. It is for this reason that the board has resolved to suspend the Executive Head of Listed Investments Fidelis Madavo and Assistant Portfolio Manager Victor Seanie with immediate effect."

"As this is an ongoing investigation, the board will keep all its stakeholders informed on the developments. The PIC continues to uphold good corporate governance and will do everything in its power to restore the integrity of the institution."

Perplexing investment decisions

The inquiry was announced by President Cyril Ramaphosa in mid-August 2018, following allegations of poor governance, kickbacks and perplexing investment decisions at the institution which manages roughly R2trn worth of assets on behalf of public sector employees.

The PIC invests on behalf of the large Government Employee Pension Fund and four smaller state-run funds, including the Unemployment Insurance Fund.

Madavo informed the inquiry of his suspension before kicking off his testimony on the second day of hearings. He said he was served with a letter of his suspension on Tuesday morning.  

"The reason for my suspension was there was an internal audit investigation into the AYO transaction, as the head of the division they found it proper to suspend me with immediate effect," he said, adding he had resolved to go ahead with his participation in the inquiry.

He said he had been instructed not to communicate with PIC staff during his suspension

Madavo said said the AYO transaction took place when I was overseas ."I was not around, but as the head of the division I was suspended."

pic  |  ayo technology  |  lex mpati  |  sa economy


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