PIC's R9.3bn loan to Jayendra Naidoo was 'reckless', says former executive
According to the PIC's former executive head of risk Magula, Lancaster was completely reliant on dividends received on its Steinhoff shares to service the loan
The PIC's decision to loan R9.3bn to Jayendra Naidoo’s company to buy shares in Steinhoff was reckless, one of the state-owned investment managers’ former executives said on Monday. Paul Magula, the former executive head of risk at the corporation, was dismissed in 2018 by the PIC on allegations of “poor performance” and for his role in the collapse of VBS Mutual Bank where he had served as a non-executive director at the behest of the PIC. The PIC owned a 26% stake in VBS. The PIC oversees an investment portfolio worth more than R2-trillion, mostly on behalf of the Government Employees Pension Fund (GEPF).Those retirement benefits are ultimately underwritten by the fiscus should the GEPF not have sufficient money. Among many issues raised by Magula at the commission of inquiry into the PIC was the asset manager’s loan of R9.3bn to a BEE entity headed by former trade union leader Jayendra Naidoo, called Lancaster 101. “For the GEPF, the debt-funded exposure never made commercial sen...
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