MUCH noise has been made by commentators – the professional, Government and the armchaired variety – about the Mpati Commission Report into alleged impropriety at the Public Investment Corporation (PIC). The Commission was chair by retired Judge Lex Mpati and assisted by Gill Marcus and Emmanuel Lediga.
Leading the headlines at almost every turn, the name of Sekunjalo, inter-changed with AYO Technology Solutions (AYO). Yet “Sekunjalo” was never included in the Commission’s self-declared terms of reference. So, how did the Mpati Commission and subsequent media reporting, end up being dominated by discussions around this Group, and its executive chairman, Dr Iqbal Survé, and the Commission reporting on “findings” against Sekunjalo?
That’s a question we may never really know the answer to.
However, what we do know is that the resultant negative publicity surrounding Survé and the various companies his Sekunjalo Investment Holdings (SIH) has some form of investment in, have subsequently had everyone scurrying in different directions for being associated with the “tender swindler,” (as per the infamous Zapiro).
The country’s banks have taken all the negative media to heart, claiming “Reputational Risk” and on what appears to be a whim, and without any shred of evidence to support them, have now in concert, started closing all bank accounts belonging to these companies, as well as some of their executives.
Despite spending an inordinate amount of time, effort, and resources to correct facts, and the misrepresentation – all falling on deaf ears – the negative narrative persists.
At the behest of Parliament’s Standing Committee on Finance (SCOPA), among others, SIH approached former judge, Advocate Willem Heath, to conduct a thorough review of the Mpati Commission report. By all reports, Heath only undertook the assignment on the basis that whatever he found because of his investigations and interrogations, he would be able to publish – good or bad.
This, therefore, is a summary of that review (which extends to 173 pages,) which is damning and provokes much food for thought, since in essence, it eviscerates the detritus that has been spewed in the media since 2018, and upon which Survé, Sekunjalo and related companies, have been hung, drawn, and quartered.
Summary of findings:
Illegality of the Mpati Commission report – Similar to findings of the conduct of the Seriti Commission into the Arms Procurement fiasco, Heath has determined that the Mpati Commission had a disregard of and failed to comply with fundamental legal doctrines and principles and procedural fairness. On that basis, the Commission’s report is reviewable and stands to be set aside. There has been an undermining of the rule of law, says Heath, and it is his considered opinion that the Commission exceeded its powers (ultra vires).
Terms of Reference (ToR) – right at the beginning of his review, Heath states that his report contains “disparaging findings and criticisms,” including “adverse findings and denunciations in relation to the conduct of the Commission and the Commission’s findings and recommendations in the Commission’s Report.” Heath found that that the Commission went beyond the scope of its own ToR.
Failure to verify evidence and relying on untested allegations – The content of the Commission’s Report is substantially devoid of connecting a finding or statement of the Commission by referring to relevant document, explains Heath. He also points out that the Commission’s website omits documents that are in the public interest and that allegedly pertain to the findings. In fact, as Heath points out, there is not a single reference to the contracts/agreement between the PIC and the “Sekunjalo Group,” Premier, AYO, Independent Media or Sagarmatha. “There can be no other interpretation than that the Commission did not even study any of the agreements between the PIC and the aforementioned entities.”
Failure to investigate – not only did the Commission fail to call on the likes of Steinhoff (the biggest accounting fraud this country has ever seen), the Commission also erred or refused, to investigate substantial irregular transactions entered into by the PIC – the very reason why the Commission was supposedly convened in the first place. It’s unclear therefore, as to how the Commission “investigated” these contracts.
Heath also raises critical concerns over the conduct of the evidence leaders throughout the process, citing that the Commission and its evidence leader were aware of significant corruption (in other companies), yet did nothing about it.
Conflation of Companies – Heath acknowledges the Commission’s “inexplicable error of fact” in basically lumping Premier Fishing and Brands (Premier), Independent Media, Sagarmatha and AYO, under one umbrella – the Sekunjalo Group, which in fact, does not exist. It is from this conflation that most of the ensuing negative articles have compounded myth into their version of fact, consistently coalescing Sekunjalo with AYO per example, which is a substantive error.
Theatre of the mind – the swaying of public opinion during the Commission is also a highlight of Heath’s scathing review, in which he remarks on the manufacture of facts through opinion pieces and analysis served up for pre-determined purpose to influence various publics.
Evidence examined by Heath shows that evidence leader, Advocate Jannie Lubbe, ignored crucial evidence he was aware of, and coached and directed witnesses to seek a pre-determined outcome.
The role of the media was also not overlooked by Heath. Media should not take sides but report on fact, without a side dish of rhetoric or hyperbole, and not “air-brush a favoured witness’s flawed evidence and decontextualise an honest account by a witness already condemned for what he/she is perceived to represent”.
In short, the Commission functioned as a repository of allegations and insinuations.
Inaccurate and misleading media/public narrative may lead to the illusion of truth – a situation Sekunjalo and its associated companies are all too familiar with.
AYO – The Mpati Commission Report has made some very strong allegations concerning AYO, including the alleged manipulation of shares, valuation, and the subsequent drop in share price (an aside here – the share price is heavily influenced by media reporting. We shall say no more).
The Commission claims that a ‘proper’ valuation was not done. Yet, as Heath points out in his report, in the testimony provided to the Commission, it would seem several valuation approaches were used by the PIC itself to determine the initial share price it bought in at, which was also determined by a forward multiple (potential earning power) - as is customary in valuing technology entities.
The “close” relationship between Survé and Dr Dan Matjila – This has been one of the key phrases that has influenced public perception. Advocate Heath remarks that there was no factual basis for the Commission’s contention of a close relationship between the two.
It is an irrational statement he finds, also observing how it was used twice in the report and in both instances, there were no references to witness statements, testimony, or documentary evidence.
In fact, the Commission categorically stated in its report that there was “no undue benefit for any PIC director, or employee, or associate or family member of any PIC director or employee at the time.”
Heath found no evidence “and neither could the Commission of any special relationship between Survé and Matjila”.
Malfeasance – Heath could find no evidence of wrongdoing on the part of Sekunjalo in relation to any transactions with the PIC. He also says that the term ‘malfeasance’ seems to have been “introduced.”
Findings on Sekunjalo – Contradictions abound in the Mpati Commission Report. For example, notes Heath, the Commission’s report states: “The Sekunjalo Group Investments showed a marked disregard for PIC policy and standard operating procedure.” Heath, however, finds no rational connection between this allegation and the Commission’s actual report, which even specified that “there is no evidence of impropriety or contravention”.
Heath concludes that the Commission having made such broad and unfounded “findings” has resulted in substantial financial and reputational prejudice and damage to not only Sekunjalo, but to AYO, Premier Fishing, Sagarmatha, Independent Media and Survé.
The flow of funds - Heath’s investigation reveals that 3 Laws Capital is a licensed asset manager and that the funds invested by AYO into 3 Laws, were like those it had with Oasis, Investec, Vunani and other asset managers. Proof shows that 3 Laws returned AYO’s investment with interest.
On the matter of transactional flow of funds, Heath has found these to be of intra-companies’ transactions in the ordinary course of business. (Each transaction is after all, traceable and accounted for).
He concludes that it is not clear what the Commission hoped to achieve by publishing private and confidential information in relation to companies within the Sekunjalo Group of Companies. Neither Survé, nor any of the executives of these companies, were called by the Commission to clarify any of these transactions or the accusations levelled at them. Heath finds that in publishing this information, the Commission has a possible intent to cast aspersions on the Group.
In short, Heath finds that Sekunjalo and its associated companies have a sound claim for damages and restitution, not least of all, because of the direct narrative created by Ms Marcus throughout the Commission.
Postscript – the banks
As Advocate Heath was compiling his review, it became apparent that Sekunjalo and companies now associated with it, are facing bank account closures and review of their transactional facilities. He notes that each of the banks has cited media reports as being their reasons for wishing to distance themselves.
“The (Mpati) report has caused significant damage to the reputation and goodwill of Sekunjalo and threatened its very existence.
“It also imperils the livelihoods of thousands of employees and sets back an important transformation project. All of this is regrettable due to the Mpati Commission not following due process and natural justice. The report has been a grave injustice to Sekunjalo.”
On that basis, then, Sekunjalo feels that the banks’ claims are null.