Dan Matjila denies coercing BEE companies to merge in Total SA deal
Former PIC head says, however, a consortium made more sense for the deal
Former Public Investment Corporation (PIC) CEO Dan Matjila on Thursday denied he forced two empowerment companies to merge so they could buy a stake in Total SA.
The PIC ultimately funded the deal in 2015.
Businessmen Lawrence Mulaudzi, who testified at the commission in March, said his company, Kilimanjaro Capital (Kilicap), approached the PIC in May 2015 to fund the acquisition of a 25% BEE stake in Total worth R1.7bn.
But despite signing an engagement letter with the PIC, Mulaudzi said Matjila told him he had to merge with Sipho Mseleku’s Sakhumnotho group if they were to get any funding from the PIC. Mulaudzi said they were forced to “form one consortium”, with each party holding 50% of the shares.
“We realised that if we did not merge into one consortium, we would not obtain the required approval letter that had to be issued by Dr Matjila,” Mulaudzi said.
Upon hearing the news of the directive from Matjila, which left his business partners “devastated”, Mulaudzi arranged to meet Mseleku at Sakhumnotho’s offices where they agreed to combine their bids. The PIC financed the deal and the stake in Total SA was successfully acquired.
Mulaudzi’s testimony indicated that Matjila had inserted Sakhumnotho into the transaction late in the bidding process, at a point where Mulaudzi thought his company had an exclusive undertaking from the PIC to fund the transaction.
But on Thursday, Matjila said he gave no explicit instruction to Mulaudzi to combine his bid with Mseleku.
“I never mentioned it, but in my mind it was there,” said Matjila, in relation to Mulaudzi’s allegation. He said he “didn’t know what the nature of the force was”, in reference to the idea that he coerced the businessman.
Matjila admitted he did have a preference for the two entities to combine. “The most important thing was that I was transparent to both of them. They both wanted a binding letter of expression. I was uncomfortable that a company with no history (Kilicap) was trying to get R1.7bn. Mseleku had history [with us]. So a broader consortium was better for the PIC,” said Matjila.
Matjila is expected to resume testimony next week. He is about halfway through his prepared statement.