The Public Investment Corporation (PIC) and the Government Employees Pension Fund (GEPF) are resisting proposed amendments to the Public Investment Act that would ensure greater transparency, including the annual compulsory disclosure of all the corporation’s listed and unlisted investments.

Transparency of PIC investments has become critical in view of some of its questionable investment decisions and the bid by embattled state-owned companies such as South African Airways and Eskom to dip into its reserves.

As the asset manager of the GEPF and the largest investor in SA at R1.8-trillion, it is subject to intense lobbying from politically connected individuals.

For the past few years, the PIC agreed under pressure to disclose its unlisted investments. The bills proposed by Parliament’s finance committee and by DA finance spokesman David Maynier include clauses providing for the compulsory annual submission of all listed and unlisted investments to the minister of finance for tabling in Parliament in the annual report of the Treasury. A Treasury response to the proposals, which incorporated the views of the PIC and the GEPF’s principal officer, was distributed to committee members on Monday ahead of the meeting on Tuesday to discuss the bills. It said that the proposal on disclosure was not supported.

"The PIC as asset manager should not be compelled to disclose information about another entity [that is its clients] and that are also the assets owners [for example, the GEPF] without consent," the document said.

Maynier said he found it "absolutely staggering" that the PIC and the GEPF had done an about turn and were now opposing greater transparency. This was especially the case in light of the latest controversy surrounding the PIC’s investments, or potential investments, in Sagarmatha Technologies, Ayo Technology and VBS Mutual Bank, which is under curatorship. "The real question is why the GEPF, which invests the savings of thousands of public sector workers, would not want investments concluded by the PIC on its behalf disclosed to Parliament," Maynier said.

The real question is why the GEPF, which invests the savings of thousands of public sector workers, would not want investments concluded by the PIC on its behalf disclosed to Parliament

The Treasury-PIC-GEPF response also opposed an amendment that would give Parliament a say in the appointment of the PIC’s chairman, who would be appointed by the minister of finance on the recommendation of the National Assembly, and opposed trade union representation on the board.

On Monday, the PIC defended its investment in tech firm Ayo, the latest controversy to come to light. Ayo is 49.4% owned by African Equity Empowerment Investments, which is in turn 61.2% owned by Iqbal Surve’s Sekunjalo Investment Holdings. In December 2017, the PIC invested R4.3bn in Ayo through a private placement at an extraordinarily high per share valuation.

An amaBhungane report on Monday said that documents it had obtained showed that several issues of concern were raised when the PIC evaluated the investment case. This included that Ayo’s board members were not truly independent, as they had close ties to related-company African Equity Empowerment Investments.

The committee also wanted the PIC and Ayo to enter into a put option to protect against price declines, suggesting there were concerns about the placement price of R43 a share.

The PIC’s head of corporate affairs, Deon Botha, told Business Day Ayo passed the PIC’s "mandate-fit test". Botha said it believed Ayo was "an attractive catalytic investment with good prospects". The investment would promote transformation in the industry.

Asked if the PIC was comfortable with the R43 listing price, Botha said that "the share price performance is not different from most special acquisition vehicle firms in the asset acquisition phase in which strong gains follow initial losses".

Maynier said he had written to finance committee chairman Yunus Carrim, requesting a hearing on the PIC’s investment in Ayo and its "potential investment" in Sagarmatha. The PIC ultimately did not invest in Sagarmatha, which failed to list on the JSE earlier in April.

Ayo said on Monday that the PIC was not the only party interested in buying its shares when it listed, and that it did not need the PIC’s R4.3bn investment to stay afloat as it was "a substantive and profitable business, with significant contracts and market share".

The company said neither Sekunjalo nor Surve directly held its shares and it had no relationship with Sagarmatha.

Ayo’s share price fell to R24 on Monday before recovering slightly to R26 at close of trade.