PIC clams up over loan to Lancaster
DA says asset manager’s CEO should give evidence on the role of Steinhoff’s empowerment shareholder in accounting scandal
The Public Investment Corporation (PIC) has refused to provide any details about the R9.3bn that it provided to Lancaster 101 in 2016 to drive transformation at Steinhoff International.
Ahead of confirmation by the PIC it appears that government employees’ exposure to Steinhoff is substantially more than the R25bn indicated so far.
The R25bn relates to the PIC’s 8.11% equity stake in Steinhoff and does not take into consideration the possibility that it will have to write off much of the R9.3bn loan to Lancaster.
DA finance spokesman David Maynier said he would call PIC CEO Dan Matjila to give evidence on the role of the PIC and the Lancaster Group in the scandal surrounding Steinhoff.
Maynier told Business Day he had proposed that Matjila be one of the key witnesses in the financial committee’s public hearings into the scandal. They are expected to take place on or about January 31.
Lancaster is described as Steinhoff’s empowerment shareholder. It is 51% owned by the PIC and 49% by former trade unionist Jayendra Naidoo.
Naidoo, who has had a long relationship with Christo Wiese-related companies, was appointed chairman of Steinhoff Africa Retail (Star) ahead of its JSE listing in September.
Lancaster was due to play a critical role in the plan to inject a controlling stake of Shoprite into Star. However, this plan was abandoned in the wake of the Steinhoff accounting scandal that rocked the market in early December. It is unclear what assets Lancaster holds.
Naidoo referred queries to the PIC and would only talk in general terms about the current "devastating situation".
He told Business Day he was not sure how long it would take to get a handle on the situation.
"Right now there is a lot of attention being focused on the issues," Naidoo said.
Maynier said he had been unable to get clarification on the extent of the PIC’s indirect exposure to Steinhoff through entities such as the Lancaster Group.
Business Day was also unable to get a response from the PIC to requests for details of its investment in Lancaster.
In September 2016 Lancaster bought 60-million Steinhoff shares at R75.98 a share in an accelerated bookbuilding exercise. The total cost of those shares was R4.6bn. They are now worth R360m.
In the schedule of its unlisted investments that was released in September 2017 the PIC said it was funding an empowerment consortium to acquire a stake in Steinhoff and to acquire equity in a special-purpose vehicle that held shares in Steinhoff. It said the investment was made to drive transformation "in an untransformed sector".
It wanted to improve black ownership and management control at Steinhoff and boost the appointment of more historically disadvantaged individuals and black women at Steinhoff. It described the R9.3bn investment as "financially underperforming" due to subdued operational results and tax investigations by German authorities.