Tim Cohen’s commentary: A threat to black management excellence at PIC?
It is a sad indictment on the state of journalism that Daily Maverick continues to slant its Public Investment Corporation (SPIC) coverage to further their media smear campaign against Dr Iqbal Survé and Sekunjalo and in doing so tarnishing black excellence.
There is only one word for Tim Cohen’s article in Daily Maverick, “After the Bell: The PIC shanks AYO out of the rough, on to the fairway” - ludicrous.
Cohen has used the latest PIC annual report as a news point of reference to flog a dead horse - that of the settlement deal between AYO Technology Solutions and the PIC in the Western Cape Division of the High Court on March 24, 2023.
The matter is done and dusted, but Cohen via Daily Maverick is set on continuing a targeted media narrative against AYO.
The PIC’s annual report, released this week, says it is “Charting a course of excellence”.
What the PIC management did not do in the annual report is rehash the PIC/AYO dispute as it is no longer relevant.
So one has to ask why Cohen continues to slant his story in such a way.
What was the news:
The news was that despite tough economic challenges, the PIC had managed to steer the investment firm to grow its total assets under management by 3.6% to R2.69 trillion. The Government Employees Pension Fund grew by 2.89% or almost R70 billion to R2.369 trillion by March 31, 2024, despite withdrawals of R117 billion in benefit payments.
It also said the investment company had addressed 242 of the 243 Mpati Commission recommendations on addressing corporate governance issues.
What I found a remarkable achievement was that as an anchor investor in many black-owned firms, the PIC has enabled experienced black professionals to build credible track records.
In its report the PIC says, “At the start of the Developmental Manager Programme in 2009, black-owned firms managed only 17% of the R65bn in externalised assets. By the end of 2023/24, R167bn (66%) of the R253 billion allocated to domestic firms was managed by black-owned entities with more than 51% black ownership and 30% black management control.
While Cohen could have spotlighted the remarkable achievement of the PIC in excelling at its duty of promoting black economic empowerment, he chose not to.
This as there is new management heading the PIC that takes corporate governance issues very seriously. They have bent over backwards to tighten their ship.
The PIC’s CEO, Abel Sithole, and PIC’s chairman, David Masondo, who is also the deputy finance minister, are held in high esteem with vast experience under their belt and they are set on growing the PIC with brighter prospects ahead with GNU, lower inflation and so on.
Cohen offers readers a quick refresher on how the PIC invested R4.3 billion in the AYO in 2017 and how the share price was decimated and went from R43 to R4.70 a share.
He then infers that the management of the PIC erred in its settlement in AYO.
He writes, “PIC acted and went to court although, alas, only some R1.2bn of the initial investment remained. However, the PIC then shocked the investment community when it settled the case out of court, effectively for half what was left of the cash pile. For a kind of bogus share buy-back, the PIC got R619 million, which we heard today was paid in April last year. Phew. Relief.
"But now it turns out that the AYO share price has dropped even more, from the R4.50 at which the deal was done to around 50c. So, how does the PIC feel now about its new deal? PIC CEO Abel Sithole today defended the decision, saying that “the PIC derived sufficient value at the time the deal was done,” Cohen penned.
Cohen says, before he reveals the true focus of his story that is AYO,“The only real way to judge how the PIC actually operates is to look at its unlisted investments, even though they are barely 5% of the total book.”
Cohen takes issue with the fact that PIC’s CEO Sithole said, “AYO will not be treated differently” from its other struggling investments.
Cohen once more twisted the fact that most listed companies on the JSE lost tons of cash last year as foreign direct investment fled the country and the economy took a nosedive.
Every other day in the past year the investment community of X has made jokes about how the PIC buys a stake in a company and the shares immediately fall.
However, the PIC addresses the issue of the tough capital markets in its annual report and how in the short-term its investments have taken a beating, but not the long term. There is nothing dodgy about falling share prices on the JSE.
Cohen reveals his real target of the story, “I’m not even sure what that means. Nobody is asking for them to be treated differently. What state pensioners are asking for is that the PIC should not be so ridiculously gullible. Not once, but twice. And that when it is cheated, it gets angry and demanding, as opposed to treating it like an unfortunate dip in the market. And that’s not even considering its other disastrous investment involving Survé, in the Independent Group.”
Cohen’s treatment of the PIC executive team, in trying to cast aspersions on the AYO and the PIC’s settlement deal, is highly disrespectful and implies that they are “gullible” as leaders.
Just where does Cohen get off by calling the highly respected Sithole and deputy finance minister Masondo gullible because they aren’t playing into a false narrative that he is trying to create? It was also somewhat painful to read as was the golfing analogy he started the story with.
I am surprised readers on X haven’t piled into the narrative of a white patriarchal man takes on black excellence because unfortunately that is the case.
There is also a massive difference in the general media narrative in loss making investments by the PIC in white-owned EOH and Steinhoff versus black-owned AYO ( let alone the complete silence on the matter of the PIC’s deal with black-owned Jayendra Naidoo’s Lancaster's R10 billion loss, which too went South).
Steinhoff no longer exists. Its executives are in court facing corruption charges.
Furthermore, EOH’s share price dropped from R130 a share to R1.94 yesterday. The executives are in court for corruption. EOH has previously said it would take action against those who had perpetrated the theft, including filing civil claims in June 2021 against several former EOH executives, seeking total damages of R6.4 billion.
AYO, despite allegations, has never been found to be corrupt.
While EOH has restructured and has a new management team in place, so too has AYO in an attempt to rebuild investor confidence. However, the media narrative in how they are treated is miles apart. Why?
This points to the fact that Daily Maverick is continuing its media narrative against the black-owned Sekunjalo stable of companies by hook or by crook.
It does the PIC a disservice, Sekunjalo a disservice and taints the image of journalism.
Philippa Larkin is the executive editor of Business Report.
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