Dr Dan Matjila Former PIC CEO at the PIC judicial commission of inquiry in Pretoria.
Dr Dan Matjila Former PIC CEO at the PIC judicial commission of inquiry in Pretoria.
Image: Freddy Mavunda

Former Public Investment Corporation CEO Dan Matjila has confirmed the PIC approved a proposal to exchange the debt and equity investment made in the Independent Media group in exchange for shares in Sagarmatha in December 2017, shortly before the ANC’s elective conference.  

Matjila’s testimony adds credence to claims by Ayo Technologies’ former chief investment officer, Siphiwe Nodwele, that the deals were being approved ahead of the ANC elective conference in Nasrec for fear that new leadership of the ANC could emerged and make leadership changes to the PIC.  

The PIC invested R237.5m to acquire a 25% stake in Independent Media South Africa (INMSA) when Sekunjalo — controlled by businessman Iqbal Survé — acquired the group from its Irish owners in 2013. The PIC, through a range of debt facilities, made another R721m available to the group, loans which have since not been serviced or repaid.

Matjila told the commission of inquiry into affairs of the PIC on Tuesday that the asset manager’s portfolio management committee discussed a proposal from Sekunjalo Investment Holding (SIM) in October 2017 regarding a transaction that would see Sekunjalo swap the debt owed to the PIC in exchange for shares in a yet-to-be listed company called Sagarmatha. Sagarnatha intended to list on the JSE. 

“SIM proposed to acquire all the shares and loan claims that the PIC has in Sekunjalo in exchange for shares in a new company to be listed named Sagarmatha. This would provide the PIC with an exit from INMSA,” Matjila said.

He said the value of the outstanding loan and shares was at that point valued at R1.55bn. 

But the terms of the swap appeared to be very favourable to Sekunjalo. The PIC would receive shares based on the value of Sagarmatha in the prelisting statement that was yet to be published. This effectively would have ceded the right of the PIC to take a view on the valuation of the completely new entity.  

The PIC initially rejected these terms in a counteroffer it provided to Sekunjalo. Matjila said that while the PIC was happy to exchange its shares in Independent for shares in Sagarmatha, it wanted to be paid out in cash for the amount owing on the debt which equated to R1.2bn. 

But for reasons yet to be explained by Matjila, and at a meeting convened on December 6, 2017, to formally approve the proposal, no mention was made of what had happened to the counteroffer it had presented to Sekunjalo. 

In a letter from the PIC to Surve in January 2018, the debt-for-share swap was agreed to.

“This approval was reduced to an agreement signed by me on behalf of the PIC and concluded with SIM,” said Matjila