THE BOTTOM LINE
Beady eyes zero in on Public Investment Corporation
Commission of inquiry to look into allegations of shady dealings, while Competition Tribunal weighs up funding
The past few months have been quiet for the mergers and acquisition business. It may be that deal makers are either too uncertain or too pessimistic about the outlook to be persuaded to even consider forward-looking transactions.
For this reason the lawyers and investment bankers who rely on a steady churn of deals must be hugely relieved the controversy that has dogged SA’s largest investor has not dulled its appetite for deal making.
The Public Investment Corporation (PIC), which oversees the management of about R2-trillion of funds, dominated proceedings at the competition tribunal this week. On Wednesday the tribunal heard argument on three large mergers dealing with the introduction of BEE investors in Karan Beef Holdings, LA Crushers and Provest Group. In each case the PIC provided the funding for the deal being interrogated by the competition authorities.
In the biggest, the R2bn-plus Karan Beef deal, the tribunal attached conditions, as recommended by the competition commission, aimed at “providing a means for historically disadvantaged persons to participate in commercial farming activities”. No conditions were attached to either of the other two deals.
Elsewhere in Gauteng preparations were being made for a completely different category of hearings, due to kick off next week, in which the PIC will also play a central role.
On Monday a commission of inquiry into allegations of impropriety at the PIC will begin sitting. The commission will make findings on whether the PIC contravened its own policy or generated undue benefit for any PIC director or employee or third party in the process of disbursing billions of rands between 2015 and 2018.
Given the much closer scrutiny it is now being subjected to, it’s likely that the PIC’s appetite for deals will also be dulled in the months to come.