PIC’s investment in Iqbal Survé’s AYO Technology claims first scalp

The Public Investment Corporation (PIC) has fired assistant portfolio manager Victor Seanie nine months after he was placed on suspension for being involved in the state-owned asset manager’s R4.3-billion investment in Iqbal Survé’s firm AYO Technology Solution.

Seanie, who was suspended with immediate effect on 21 January 2019, was dismissed from the role he held at the state-owned asset manager for more than three years.  At the time, he was suspended along with the PIC’s executive for listed investments Fidelis Madavo, who was also involved in approving the AYO deal ahead of its JSE-listing in December 2017.

The PIC manages R2.13-trillion in government pension funds through the Government Employees Pension Fund (GEPF) and other social funds including the Unemployment Insurance Fund and Compensation Fund – making it Africa’s largest asset manager.

Seanie was informed on Tuesday 22 October by the PIC about the termination of his employment contract after he was subjected to a disciplinary process, where he faced about three charges. The charges he was found guilty of include, among others, his request to research AYO’s investment prospects, not informing the GEPF that a letter of irrevocable undertaking by the PIC to invest in AYO shares was signed and not co-operating with an internal investigation about how the PIC invested in AYO.

The disciplinary process recommend that Seanie’s employment contract should be terminated on one month’s notice, but the PIC resolved to part ways with him by paying him for this period.

Speaking to Business Maverick on Thursday evening 24 October, Seanie, who was an analyst responsible for assessing the value of the AYO shares but was a junior employee involved in the deal, said he plans to challenge his dismissal and findings of the disciplinary process.

“I will do what is best for my career and this will involve challenging the decision (by the PIC to fire him). I will (also) be challenging the whole disciplinary process; its findings, process, and everything,” he said.

Seanie’s undertaking might see him being pitted against the PIC in a dispute at the Commission for Conciliation, Mediation, and Arbitration offices or court – throwing the asset manager in another scandal after its governance improprieties featured prominently at a commission of inquiry, which began on January 2019.

Seanie believes that he is being used by the asset manager as the “fall guy” because he is the first PIC employee to be fired for his involvement in the AYO transaction while senior executives he reported to, including Madavo, have not faced a similar sanction.

“The PIC had to find somebody to pin everything on for it to be seen as if it was doing something…They rushed my dismissal to claim that a certain person was responsible for governance failures on the AYO transaction… The PIC is trying to find a fall guy for their lack of proper oversight on the AYO transaction.”

The PIC’s investment in AYO – a technology firm owned by businessman Iqbal Survé, who also owns investment holding firm Sekunjalo and chairs Independent Media – was controversial on several fronts.

The PIC decided to invest in AYO, becoming the only institutional investor to buy shares in the firm. It shelled out R4.3-billion to subscribe for shares in AYO at a valuation of R43 a share, effectively giving the PIC a 29% stake in the firm. Today, AYO’s share price is worth R5.60, meaning that the PIC’s investment has lost more than R3-billion in market value.

Seanie has also taken umbrage with the disciplinary process that led to his axing, saying it lacked credibility because its chairperson, who is not known to Business Maverick, was not independent.

“He was not independent because he was hired by the PIC legal representatives. The chairperson didn’t make up his own mind after studying the facts. Instead, he asked the PIC about what it suggests as recommendations and sanctions to be imposed on me instead of independently deciding what the recommendations and sanctions should be.”

He added: “The disciplinary process was instituted more than a year after the event (the PIC’s investment in AYO). The bulk of the charges against me were known to the PIC for more than a year before I was charged.”

Seanie also questioned the timing of his dismissal, saying it’s suspect because it comes at a time when an inquiry probing governance issues at the PIC, which is chaired by retired supreme court judge Lex Mpati, is yet to conclude its final report. The report is expected to be submitted to President Cyril Ramaphosa on 15 December.

PIC hits back

In a statement confirming Seanie’s axing, the PIC’s head of corporate affairs Deon Botha said his disciplinary process was chaired by an “independent chairperson”.

“Mr Seanie was found guilty of the disciplinary charges proffered against him, which included charges of breaching the PIC’s internal policies in investment decisions,” Botha said on Thursday 24 October.

“Mr Seanie is one of several senior investment professionals who went through, or are undergoing, internal disciplinary proceedings, at this stage. The PIC board is fully appraised of disciplinary proceedings against several implicated PIC officials and, like the PIC Commission of Inquiry, concurs with the view that these should proceed.”

Business Maverick understands that the disciplinary process of Madavo, a senior PIC executive who also signed off on the AYO deal, is still ongoing. Seanie testified at Madavo’s disciplinary hearing at the end of September.

Matjila and Survé implicated

Testifying at the PIC commission of inquiry in July 2019, Seanie blew the lid on how the state-owned asset manager’s investment in AYO flouted its investment processes.

Seanie said he was put under enormous pressure by former PIC CEO Dan Matjila to meet the 15 December 2017 deadline for the PIC to subscribe for AYO shares before its JSE-listing.

Seanie said Matjila was a close friend of Survé, which influenced the PIC’s decision to invest in AYO than its investment merits. Matjila and Survé have strongly denied this, saying the AYO deal was properly vetted by the PIC’s investment committee.

According to his testimony, Seanie said no substantive due diligence was done by the PIC on the deal and it was rushed to benefit AYO, which approached the state-owned asset manager with a “fixed” R43-a-share valuation that was not negotiable.

About the rushed nature of the deal, Seanie said that in three initial public offerings he worked on, the initial process from receiving a pre-listing statement to the subscription of shares was 11 weeks. AYO was finalised in three weeks.

A pre-listing statement informs would-be investors about the number of shares a company intends to sell when it lists. It also contains information about a company’s financial statements and business model, which investors use to determine the value of shares. BM