PIC Commissioners (from left to right) Gill Marcus, Lex Mpati, Emmanuel Lediga. Picture: WARREN THOMPSON
PIC Commissioners (from left to right) Gill Marcus, Lex Mpati, Emmanuel Lediga. Picture: WARREN THOMPSON

The chairman of a company at the centre of a dispute with the Public Investment Corporation (PIC) over  the use of a loan says he thinks a breakdown in communication between various departments at the state-owned asset manager led to the current situation.  

Fernando Acafrao, the chairman of MST Vehicles, a “social impact” company which borrowed money from the PIC to build and convert bus chassis into a range of specialised units for socially important projects including mobile maths learnerships and AIDS clinics, cannot understand why the PIC thinks the company has reneged on its contract. 

“The PIC is not bad at all, there is just miscommunication left, right and centre. So that was my frustration,” says Acafrao.   

He was speaking to Business Day following Wednesday's session at the PIC commission of inquiry in which advocate Kenny Oldwage, acting on behalf of MST, cross-examined the PIC’s executive head for impact investing, Roy Rajdhar. 

MST made the application to cross-examine Rajdhar following his testimony at the commission in March, in which he and another PIC executive, Constance Madzikanda, stated that MST had not used the loan for its intended purpose and had also not honoured the repayment terms.

Under cross-examination on Wednesday, Rajdhar steadfastly maintained that according to his interpretation of the loan agreement, MST was to manufacture new vehicles with the money. 

One of the reasons why the transaction has been the subject of such scrutiny is because Pretty Louw, who was accused of being romantically linked to former PIC CEO Dan Matjila, was acting as an agent for MST. 

An independent inquiry conducted by advocate Geoff Budlender, which investigated the allegation, found no evidence of such a relationship. 

Acafrao said Louw was appointed to find clients for MST and was nothing but professional.

“She worked extremely hard to put proposals together and to develop opportunities. We were not aware of any links to Dr Matjila. And since we didn’t get any work from her and the PIC, it never bothered us. She also had absolutely nothing to do with either securing the loan or the grant.”

The PIC disbursed R20m to MST in June 2017, as well as providing a grant of R5m from its corporate social investment fund to the company.

Acafrao says they began building the units before they had received the money from the PIC, which put them in a difficult situation when the money was not forthcoming. The company began using money earmarked for other things, like money owed to the SA Revenue Service, because of the delay in receiving the funds.

During the loan application process, MST requested the loan amount be reduced by R9m to R21m. This was because Daimler-Chrysler, the parent company of Mercedes-Benz, lent R9m in kind by way of seven new bus chassis.

Acafrao says the loan term from Daimler was better, hence it made sense to reduce the amount being sought from the more expensive PIC funding.

MST then built and modified the chassis for use with its social projects.