The Public Investment Corporation is to withdraw its investment in the Independent Media Group which owns The Star. Picture: SUPPLIED
The Public Investment Corporation is to withdraw its investment in the Independent Media Group which owns The Star. Picture: SUPPLIED

The Public Investment Corporation (PIC), who invests pension money on behalf of government employees, has started the process of withdrawing its controversial investment in Independent Media Group.

Responding to a written question from DA MP Alf Lees on Wednesday, finance minister Nhlanhla Nene said the PIC was working on an exit strategy in respect of its investment in Independent Media “in line with the terms and conditions of the transaction”. He declined to provide any details of the strategy, citing the “sensitive nature of the information”.

The PIC’s exposure to Independent Media is estimated at nearly R1.3bn, of which more than R1bn is debt. Its original equity investment of R166m in 2013 was written down to R108m by the end of March 2017, indicating operating losses. Of its outstanding debt to the PIC, R408m is due for payment in August.

Independent Media‚ which has been financially under-performing for several years now‚ is headed by businessman Iqbal Survé. His Sekunjalo Media Consortium is the majority shareholder in Independent, with the PIC and Interacom Investment Holding, a consortium consisting of China International Television Corporation and China-Africa Development Fund.

Initially shrouded in secrecy, the PIC’s investment came to light in 2016, when the fund manager published a list of its investments in unlisted entities amid criticism that funding is recklessly being provided to politically connected people. Unlisted investments made up less than 5% of the PIC’s overall portfolio in the 2018 financial year, but no details of these deals have been published this year.

Commenting on its media investments more broadly, the PIC said in a statement earlier on Wednesday that it has investments in a number of media institutions through the shares obtained in their holding companies, but that the media’s reporting focus “has almost exclusively been on a small number of underperforming investments”. It said there is no danger that funds under the PIC’s management are “at a danger of being eroded, or that the PIC has underperformed as an asset manager”.

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