Connect with us

Hot News in World

PIC inquiry: R5.2 billion Karan Beef deal ‘in limbo’ amid whisteblower claims

Public Protector: We're not fighting with Gordhan, we want to help him clear his name


PIC inquiry: R5.2 billion Karan Beef deal ‘in limbo’ amid whisteblower claims


The Public Investment Corporation’s proposed a R5.2bn Karan Beef transaction may be in jeopardy, the judicial commission of inquiry into the state-owned asset manager heard on Tuesday.

The commission is investigating allegations of wrongdoing at the PIC, which manages R2.2trn in investments on behalf of public servants.

Karan Beef transaction advisor, Sello Motau, testified that the PIC team
has said it will not be able to implement the deal until the inquiry
finalises its investigation into allegations of corruption made by an
anonymous whistleblower. Motau said the long stop date for the deal expires on Wednesday, May 22.

“As a result, this transaction has been placed in limbo,” he said. “This is likely to derail the transaction despite very positive outcomes that the transaction could have for the economy and transformation in the agricultural sector.”

The commission’s assistant commissioner, Gill Marcus, appeared surprised that the future of the deal hinged on the commission’s unmasking of the anonymous whistleblower and probing the corruption claims. She said that revealing the identity of the whistleblower was not part of the commission’s terms of reference.

The chair of the Inquiry, Judge Lex Mpati, said a report would first have to be submitted to President Cyril Ramaphosa, who would decide whether or not to share it with the public.

Motau said the mass resignation of the PIC board on February 1 had also impacted the Karan Beef deal, as a scheduled investment committee meeting, where proposed amendments to the transaction were set to be discussed, did not take place.  

An anonymous email, circulated by a whistleblower called “James Noko” alleged that the price of the Karan investment was inflated, a claim that Motau has denied.

“To the best of my knowledge, the price of the Karan Beef [deal] was not inflated. The final price was agreed with the seller after extensive negotiations.”

‘Precarious position’

Motau told the inquiry that under the planned deal, the PIC would control 60% of the company, 30% would be held  by a BEE consortium and the seller, the Ivor Karan Family Trust, would retain 10% of the shares.

He said the new Karan Beef shareholders would aim to pursue acquisitions in Botswana and Namibia, as these countries have export permits into Europe, something which the business does not have.

On Tuesday, Tshifhango Ndadza, a senior market risk analyst at the PIC, told the inquiry that the process of finalising the deal was at an advanced stage, with the fund seeking independent valuation of the deal, and will be conducting confirmatory due diligence.

Karan Beef was established by the Karan family in 1974 and operates the largest cattle feedlot and abattoir on the continent. In October, the Karan family agreed to sell a 90% stake in the business.


Source link

Continue Reading
You may also like...
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


To Top
error: Content is protected !!