Standard’s Sim Tshabalala ‘stopped dubious R45m PIC payment’
CEO Sim Tshabalala intervened to prevent former Public Investment Corporation boss Dan Matjila facilitating a 'potentially irregular' R45m fee
Standard Bank CEO Sim Tshabalala intervened to prevent former Public Investment Corporation (PIC) boss Dan Matjila from facilitating a questionable R45m fee for a businessman the asset manager had helped to acquire a stake in mortgage provider SAHome Loans.
This is according to Standard Bank special counsel Ian Sinton’s testimony at the Mpati commission of inquiry into alleged governance failures at the PIC on Wednesday.
He was giving his version of events surrounding the latter’s acquisition of shares in SA Home Loans after US bank JPMorgan offloaded its 50% stake in the wake of the global financial crisis.
The PIC, which is the biggest investor on the JSE and has more than R2-trillion in assets, agreed to buy a 25% share directly on behalf of its largest client, the Government Employees Pension Fund (GEPF), and facilitate the acquisition of a further 25% interest by an empowerment consortium led by businessman Kholofelo Maponya.
Standard Bank, which owns 50% of SA Home Loans, wanted the new shareholder to have sufficient resources to support the company in tough times because the nature of its business meant it needed access to large pools of capital.
To satisfy this demand, the PIC undertook to provide substantial financial assistance to SA Home Loans, and after the deal was completed came through with a R9bn facility that would be made available to SA Home Loans using GEPF money.
For doing this, the GEPF would be entitled to a 0.5% fee payable by the borrower, SA Home Loans.
Maponya, according to the testimony of PIC executives at the commission on Tuesday, believed he was entitled to a fee of R45m for facilitating the loan package based on a verbal agreement with Matjila.
The PIC agreed to pay this, by ceding the fee owed to the GEPF in favour of Maponya.
This took the form of a letter signed by Matjila and sent to SA Home Loans, who, as the beneficiary of the loan, was instructed to pay Maponya.
But Sinton and, later, Tshabalala did not take kindly to this. Sinton said the bank viewed the cession "as a method of paying for services allegedly rendered by Mr Maponya to the PIC as being potentially irregular".
Maponya was also a director of SA Home Loans and as a significant shareholder stood to benefit from the R9bn facility.
He and Tshabalala requested a meeting with Matjila where they informed him that they considered the request irregular and would oppose any payment to Maponya — rather than to the GEPF — if Matjila could not provide evidence proving the pension fund had agreed to this.
They also told Matjila, who resigned from the PIC in November, that even if this was provided they would "consider bringing such a cession of a pension fund’s assets in these circumstances to the attention of the appropriate regulator".
This warning appeared to have prompted a quick response from the PIC, which formally withdrew its request for SA Home Loans to pay the fee to Maponya.
SA Home Loans would later draw down the R9bn loan facility and the GEPF would receive its R45m fee.
Maponya is expected to testify next week, according to commission officials.