The Public Investment Corporation (PIC) had concerns about governance at Steinhoff International, which is why the state asset manager increased its investment in the entity that imploded in December 2017.
This was revealed on Tuesday at the Mpati commission of inquiry into allegations of impropriety at the PIC.
In 2016 the PIC extended a R9.35 billion loan to a special purpose vehicle Lancaster 101 to buy a 2.75% empowerment stake in the then mighty global retailer. The deal was brought to the PIC by former unionist Jayendra Naidoo whose consortium owns 25% of Lancaster, while the PIC holds 50% and the remaining 25% is meant to be allocated to a broad-based black economic empowerment (B-BBEE) group.
The opportunity proposed by Naidoo allowed the PIC to appoint a black representative on the Steinhoff board and came with special voting rights, which is the solution the PIC, which held 6.5% shares in Steinhoff at the time, was looking for in order to “influence better governance” in the company.
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