The PIC’s Acting Head of Legal Lindiwe Dlamini took the stand at the PIC Commission of Inquiry testifying about the Steinhoff transaction.

In 2016, the PIC funded Jayendra Naidoo’s company Lancaster to buy shares in Steinhoff. The loan was for R9.4 billion to buy a 2.75% stake in the company.

A Special Purpose Vehicle was set up for the transaction called Lancaster 101 while the transaction was called Project Siera at the PIC.

Since Steinhoff’s troubles, the shares are trading at below R2 a share compared to the R98 per share at the time of purchase. Within a year of PIC’s participation in the Lancaster 101 transaction, the share price of Steinhoff began to decline.

With the troubles at Steinhoff, PIC sought to invest in project Blue Buck. Project Blue Buck is the name the PIC used for another Steinhoff transaction involving the company merging its African operations and Shoprite to create Steinhoff Africa retail or STAR. This saw the PIC give up partial security on its shares in exchange for a loan from City Bank.

The follow on transaction happened under a Special Purpose Vehicle called Lancaster 102. City Bank provided funding of R6.57 billion for the deal.

Dlamini also told the Commission that the PIC’s legal department lacks in capacity compared to other fund managers and this is a risk.

The Commission has adjourned for 2 weeks until 14 May.

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