Ayo-linked PIC analyst to challenge dismissal

Assistant portfolio manager Victor Seanie has spoken out about being dismissed by the Public Investment Corporation (PIC), for his role in the hapless R4.3-billion investment into Ayo Technology Solutions. 

On Thursday the PIC confirmed that Seanie had been dismissed after his disciplinary hearing, chaired by an independent chairperson, was concluded.

Not only is Seanie the first casualty of the Ayo deal, he is also the most junior PIC person who was implicated in the transaction which an internal audit investigation described as being characterised by a “blatant flouting of governance and approval processes of the PIC”. 

Unfair process

“I am the fall guy,” says Seanie. “I am the only one fired and I am the most junior person in the whole transaction my bosses are at the office”.

Seanie was suspended in January alongside the head of listed investments Fidelis Madavo. 

In December 2017 the PIC, which manages over R2 trillion in government worker pensions and other social assets, bought a 29% stake in the company linked to Independent Media owner Iqbal Survé. It paid R43 per share, despite internal warnings by some employees that the company had been overvalued. 

Read: PIC fires first employee linked to Ayo deal

Today the PIC is trying to recover that money in a court battle, saying it was misled by Ayo executives about the company’s future prospects. 

In his appearance before the commission, Seanie detailed how the deal team had been under immense pressure by former CEO Dan Matjila, to rush the transaction without proper due diligence and to maintain Ayo’s asking price of R43 per share – despite concerns that it was overvalued. Matjila went on to sign the irrevocable subscription agreement, even though the PIC had not authorised the transaction.

Seanie was responsible for compiling equity reports which include the background information, analysis, a conclusion and recommendation on the investment, but he was at pains to explain that he did not have a final say on those reports which were reviewed by his superiors.

Key officials that were involved in the deal were Matjila, Madavo, suspended chief financial officer Matshepo More, general manager for listed equities Lebogang Molebatsi, portfolio manager for non-consumer industrials Sunil Varghese who was Seanie’s line manager.

“Mr Seanie is one of several senior investment professionals who went through, or are undergoing, internal disciplinary proceedings, at this stage,” said the PIC.

Charges

Seanie’s formal hearings began in May and ended in September. 

The three main charges he faced were breaching investment processes, not disclosing that the subscription agreement had already been signed when the PIC’s final approval committee met to consider the deal and that in his interview with the internal audit team he had been evasive in answering questions about the deal and impeded the investigation. 

He described the charges as “frivolous, bogus and unfair” saying he would “definitely” challenge his dismissal in a way that is best suited for his career. 

Read: Matjila says from his experience, Ayo’s valuation was ‘reasonable’

On the charge of breaching process, Seanie initiated the due diligence process on Ayo, without this being sanctioned by the PIC’s first approval committee, which determines if the PIC has an appetite for the investment. 

He explained to the commission that the PIC had been given three weeks, 70% less time than usual, to complete the transaction before Ayo’s JSE listing and, in the interests of meeting the tight deadline, he had requested the due diligence reports. On the second charge, he said he was not asked about the subscription agreement and that members in the committee were aware of it. Both Matjila and More, who signed off payment on the deal, were present in the meeting. 

He also rejected the assertion that he was not cooperative during the internal investigation. 

The process was not independent 

Seanie says he does not believe that his disciplinary was independent, saying the PIC should have waited for the commission to release its final report and recommendations to inform the action against him. 

The commission was supposed to release its final findings on October 31, but this week President Cyril Ramaphosa extended the deadline to December 15.

Read: Matjila: Deviation from PIC processes for Ayo deal was justified

“The commission is external and truly independent and they have disregarded what could have come out of that process,” he said.

But, in its statement, the PIC said its board was aware of the disciplinary proceedings against Seanie and several implicated PIC officials and, like the PIC Commission of Inquiry, agreed with the view that these should proceed.