The former CEO of the Public Investment Corporation (PIC) Dan Matjila has refuted allegations that his “close, personal friendship” with Iqbal Survé was the motivation behind the state asset manager’s investments in entities associated with the businessman. 

“Yes there was a continuous engagement with Dr Survé and the reason for this was not because of friendship per se, but because I and my colleagues were worried that the PIC was being increasingly exposed to high risk and I needed to be closely involved with the major players so as to be able to continually assess the situation,” Matjila told a commission of inquiry into the PIC’s affairs.

Survé, in his testimony before the commission, denied having a close friendship with Matjila, instead referring to the respect he had for him as an investment professional. 

The PIC inquiry, chaired by retired supreme court judge Lex Mpati, is presently examining events that took place in December 2017. The PIC at the time was considering a range of options regarding its investment in and loans to Independent Media, and was considering making new investments into Ayo Technologies and Sagarmatha.

All three entities are directly or indirectly controlled by Survé.

The PIC became the only investor to buy shares in Ayo when it listed on the JSE on December 17 2017. The state asset manager acquired a 29% stake for R4.3bn, paying R43 per share. On Wednesday morning, Ayo’s share price was at R9, representing a decline of 79%.

The “high risk” referred to by Matjila presumably relates to the outstanding R1.3bn that Independent owed the PIC. Despite getting Survé to sign personal surety of R500m when the PIC lent the money to Independent in 2013, the PIC has chosen not to exercise any of its rights in relation to recovering the outstanding money.

The only option the PIC was willing to entertain was a proposal from Sekunjalo — Survé’s holding company — to extinguish Independent’s debt in exchange for shares in Sagarmatha, a company that was yet to issue a pre-listing statement (PLS). 

A PLS informs investors of, among other things, the number of shares the company intends to sell at the listing and the proposed offer price per share. It also includes detailed information on the business model of the company, including financial information on which investors can rely on to inform their valuation of the shares. 

Matjila said he had never met Survé on his own to discuss Sagarmatha, but did admit to overseeing the correspondence between the two organisations and sharing research with Survé. “There has been a lot of interaction with various proposals that I passed on to the team. It was not bilateral. In the case of Sagarmatha, I never met him alone.”