Harith General Partners chair Jabu Moleketi. Picture: BUSINESS DAY
Harith General Partners chair Jabu Moleketi. Picture: BUSINESS DAY

Harith General Partners, the investment company chaired by Jabu Moleketi, says allegations levelled against it by UDM leader Bantu Holomisa are scurrilous and unfounded.

CEO Tshepo Mahloele spent most of Tuesday in the witness stand at the commission of inquiry into the affairs of the Public Investment Corporation (PIC) describing the founding, funding and operation of the Pan African Infrastructure Development Fund (PAIDF) and Harith Fund Managers.

“There is no evidence of any sort to support the claims of ‘looting’, a ‘cartel of PIC operatives’ or a ‘fleecing’ of the PIC,” said Mahloele in reference to allegations made by Holomisa.

Harith Fund Managers was started with a loan from the PIC in 2006 to establish the PAIDF.

The purpose of the PAIDF was to invest in privately owned or developed large-scale, long-duration infrastructure investments, including bridges, roads, wind farms, power stations and fibre optic networks across the continent.

Mahloele resigned from the PIC in 2006 to lead the initiative and, by September 2007, the PAIDF had secured commitments of $625m. Of this, $250m came directly from the Government Employees Pension Fund (GEPF).

The PIC appointed then deputy finance minister and chair of the PIC, Moleketi, to chair Harith’s board given that the PIC was the largest single shareholder in Harith, with a 46% interest.

Other shareholders in Harith included Absa (12%), Old Mutual (12%) and Harith employees (30%).  

The shareholding by the PIC in Harith appears to have created a rift between the two entities.

Evidence leader Jannie Lubbe produced a recent legal opinion based on the scrutiny of Harith’s founding documents stating that the GEPF should have been the shareholder in the place of the PIC.

“There was a total falling-out in our relationship with the PIC. They even started to invest directly into Africa,” said Mahloele in response to Lubbe’s question about the deterioration in the relationship.

This also meant “there was not much engagement” with the company when Harith was raising funds for the PAIDF.

In addition to repaying the loan with interest to the PIC, Harith Fund Managers paid R9.6m in dividends to the state-owned asset manager, Mahloele said. 

He also said the GEPF’s initial investment of R2.3bn in the PAIDF was independently valued and audited as at March 2018 at R3.3bn, representing gross annual returns of 11.7% over the period of the investment.