PIC hands "Zuma bank" R300 million in loans

The bank, which recently granted Zuma a loan to repay state funds spent on his Nkandla home, received four different loans to that total since July last year.

It currently owes about R300.427 million, according to the information given to Parliament's standing committee on finance by the PIC and Deputy Finance Minister Mcebisi Jonas at a briefing on Tuesday.

It marked the first ever disclosure of the closely-held investments of the PIC and Jonas said that time was needed to ensure that it was legally entitled to make the information on its clients public.

The total investments of the fund in South Africa were worth R44.6 billion at the end of the last financial year, which amounts to 2.4 percent of the PIC's entire portfolio value of R1.85 trillion.

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The fund's portfolio is roughly divided in half, between developmental projects, which accounted for 23.5 percent of its investments and private equity, at R21 billion. Manufacturing accounted for 29 percent of the portfolio, renewable energy for 16 percent, housing for seven percent and agriculture and property six percent each.

A third of its investments in Africa were made in financial services and a third in manufacturing.

The fund's investments included a R13 billion commitment to cement maker AfriSam, R1.2 billion in Independent Media, of which just over R760 million was in shareholder loans, and R603 million in Texton Property Fund. The Razorite Healthcare Fund and hospital group Busamed received roughly R2 billion.

The submission also showed that the fund extended loans of R6 million - extended in 2011 and 2013 - to the Venda Building Society, the name under which VHS Mutual traded in the past.

The PIC and Dyambeu Investments are the bank's two biggest shareholders. Established in 1982, the bank struggled financially for a considerable period but managed to post a profit of R4.9 milllion in the last financial year.

It has four branches but became widely known after granting Zuma a loan to repay R7.8 million by order of the Constitutional Court for luxuries added to his rural home during a costly and hugely controversial security upgrade.

The president transferred the sum to National Treasury in September.

Explaining last month why Zuma turned to this particular financial institution, his spokesman Bongani Ngqulunga said VBS was "one of the few financial institutions which offer home loans in respect of land owned by traditional authorities".

The land on which Zuma's home stands is owned by the Ingonyama Trust.

The chairman of the PIC, Daniel Matjila, said on the sidelines of the briefing: "It is not under our control who they give loans to. In terms of direct influence on the board [of the bank], we have no influence."

The PIC, Africa's biggest asset manager, has for months been under pressure from the Democratic Alliance to reveal details of its unlisted investments for the sake of greater transparency.

Committee chairman Yunis Carrim said opposition parties would seek to claim credit for the disclosure but probably be disappointed by the fact that what came to light was above board.

"What has come of it? Nothing but good work. The PIC should be congratulated," he said.

The Isabaya Fund was set up in 1999 with the aim of investing in projects that would generate social good, while yielding positive results for the PIC's clients, which include the Government Employees Pension Fund.

Jonas said the PIC strove to manage the tension between its developmental aims and the need to securing growth for its clients.

"It is a balance we are trying to drive very sensitively."

Floyd Shivambu, the deputy leader of the Economic Freedom Fighters, said the unlisted investments should be doubled to achieve reach five percent of the PIC's total portfolio because it was means to help "deracialise" the economy.

"I don't think PIC should be penalised for investment in unlisted companies. It is much more representative of demographics of South Africa."