Home News Dr Survé claims PIC’s investment strategy ‘racist’

Dr Survé claims PIC’s investment strategy ‘racist’

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Dr Iqbal Survé told the Mpati Commission that PIC's investment strategy is racist and favours white-owned and controlled companies at the expense of black entrepreneurs.

Dr Iqbal Survé, Executive Chairman of Sekunjalo Group. Picture: Tracey Adams/African News Agency (ANA) Archive

Cape Town – The Public Investment Corporation’s (PIC) investment strategy is racist and favours white-owned and controlled companies at the expense of firms started and managed by black entrepreneurs.

This is according to businessman Dr Iqbal Survé, who is Executive Chairman of Sekunjalo Group and a shareholder in companies including Ayo Technology Solutions and Independent Media.  

Testifying before the Mpati Commission of Inquiry into allegations of impropriety at the PIC on Tuesday, Survé said the state asset manager had spent a fraction of its R1.6 trillion investment in Johannesburg Stock Exchange (JSE) listed firms on black companies.

By last year, Survé maintained, the market capitalisation of 200 companies on the JSE was R12 trillion, and the PIC’s investment R1.6 trillion.

“I venture to suggest that companies started by black entrepreneurs that are black-owned and black managed with black beneficiaries, do not have more than a few R100 billion of the total market capitalisation of R12 trillion of the JSE,” said Survé.  

“Thus it is well recognised that 25 years into democracy the capital markets in South Africa have not transformed. Black ownership and control on the JSE remain negligible.

Survé told the commission that “real economic wealth still rests in white-controlled and dominated companies”, adding that the PIC’s strategy has had serious implications for transformation in the country.

“The result is that racial inequalities exhibited elsewhere in the South African economy, such as ownership and control of land, continue to be reproduced on the JSE,” he added.

He said while the PIC’s investments in companies such as Naspers, BAT, InBev and BHP have been successful, the asset manager did suffer “enormous losses” in the region of billions of rands due to underperformance in other white-owned firms.

This included Steinhoff, MTV, Aspen, EOH, Tiso Blackstar and Group Five.

Government employees lost R24 billion when the Steinhoff share price plummeted last year due to alleged corruption and fraud in its accounting systems.

Construction company Group Five is facing liquidation after its share price collapsed a few months ago.

“PIC has recently lost its investment in Steinhoff to the tune of R24 billion and this stands out because Steinhoff was always regarded as a top performing company – controlled by whites and in the main considered a leading South African brand.”

President Cyril Ramaphosa appointed the Mpati Commission last year and gave it six months to complete its work. He has since granted it an extension until July. 

Business Report