Dan Matjila. Picture: SUNDAY TIMES
Dan Matjila. Picture: SUNDAY TIMES

The executive chair of a BEE company “imposed” on a competitor at the request of the Public Investment Corporation (PIC) during the bidding process for a stake in Total SA in 2015 has strongly disputed the allegation that his company was favoured by Dan Matjila, then CEO of the state-owned asset manager.

Sipho Mseleku, the executive chair of Sakhumnotho Group Holdings, told the PIC commission of inquiry on Monday that Matjila played no part in getting his company to combine with Kilimanjaro Capital, run by Lawrence Mulaudzi, in the run-up to the awarding of the 30% stake in Total SA.

Sakhumnotho, which Mseleku describes as a pan-African investment holding company established in 2000, invests in a wide array of industries and has previously accessed funding from the PIC for stakes in Northam Platinum and a failed bid for 10% of Ecobank, a west African-based banking group.

Mulaudzi testified before the commission in March about how Sakumnotho muscled into the deal at the insistence of Matjila to acquire a BEE stake in Total SA after the PIC had previously signed a “binding engagement letter” with Kilimanjaro which, in Mulaudzi’s view, implied exclusivity.

“Matjila told me Mseleku’s company must merge with our company to form one consortium and that we had to give Mr Mseleku 50% of the transaction and the fees that we would ultimately receive when the deal is approved,” Mulaudzi testified at the time. 

The PIC would later provide funding of R1.7bn to facilitate the acquisition in 2015, lending a further R100m to pay the consortium’s advisers. This appeared to be far above market rates for a deal of this size, amounting to nearly 6% of the transaction value.    

Mseleku says they heard about the potential sale of the 30% stake in Tosaco by the current BEE shareholders in June 2015. He inquired with Matjila about funding from the PIC and was told in no uncertain terms that the PIC was not to going to engage with any of the bidders until the process had determined who the preferred bidders were.

He maintains that Sakhumnotho bid for the stake in the same way every other BEE company did. The tender was being run by Nedbank Corporate Finance.

He described how after he had attended a meeting with Matjila around July 2015,  he followed him to a conference room “out of curiosity” to see who the other bidder favoured by the PIC was. It was here Matjila was scheduled to meet with Mulaudzi, and after briefly introducing them, Matjila then left the room.

“Mr Mulaudzi and I had a brief discussion and mutually agreed that there can only be one winner out of the process. We then agreed to merge our consortiums and split the share 50-50. The reason for us agreeing to merge our consortiums was so that we can have a win-win situation and to increase both our chances of success,” Mseleku said.

Commissioner Gill Marcus did not accept Mseleku’s account of the incident.

“Surely if the funder takes a bidder to meet another bidder they are giving you a message,” she asked him. 

Mseleku did not see it that way. “I was just curious to see who this other bidder was.”

Despite pointing out that Kilimanjaro was very much a new company on the scene, Mseleku offered no reason why he was compelled to merge his interests with Mulaudzi at that point.  

The two businessmen also seem to differ on where they first met. Mulaudzi said it was at Mseleku’s offices. According to Mseleku, it was the introduction facilitated by Matjila at the PIC’s offices.

Mseleku took issue with Mulaudzi’s description that Kilimanjaro “was forced” to merge with Sakhumnotho.

“This was a mutual business decision by myself and Mr Mulaudzi, in order to increase the chances of both our entities succeeding in the bid for the Tosaco shares. It was a joint business decision that we took at the time without external influence.”


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