The Public Investment Corporation (PIC) and businessman Kholofelo Maponya have resumed their decade-long belligerence, with Maponya accusing the trillion-rand fund manager of brazenly reneging on a R1.04bn mediated settlement.
The long-running feud between the PIC, which administers retirement funds on behalf of the Government Employee Pension Fund (GEPF), and Maponya exploded into fresh litigation last month after the asset manager refused to implement a high-level mediated settlement, brokered by retired judge and former chief justice Sandile Ngcobo in April 2024, that would have seen officials pay Maponya just more than R1bn.
The full and final settlement would have brought closure to the protracted, multiyear conflict that arose after of two complex commercial deals for which the PIC had advanced Maponya’s companies about R700m soured.
The two deals were:
- a R480m loan the PIC advanced to Maponya’s Bolatja Hlogo Consortium (BHC) in 2014 to buy a 25% stake in specialist mortgage provider SA Home Loans; and
- a R185m loan the PIC disbursed to Magae Makhaya Housing (MMH) in 2017 for an affordable housing project that never materialised.
The transactions are not the only ones for which the PIC loaned Maponya funds. In 2015 the fund manager advanced a R362m loan to Matome Maponya Investments (MMI), another company run by Maponya, to buy the poultry operation Daybreak Foods. MMI defaulted on that loan, and the PIC seized the company’s Daybreak Foods shares.
All three transactions were approved and funded during the tenure of former PIC CEO Dan Matjila, who led the asset manager between 2014 and 2018.
According to court papers filed in the Pretoria high court by BHC last month, the relationship between Maponya and the PIC hit new lows at the end of March last year when the pension fund administrator refused to pay the R1bn settlement.
The settlement agreement shows that judge Ngcobo had persuaded the parties to agree that BHC would sell its 25% stake in SA Home Loans to the PIC. After acquiring the shares, the PIC would deduct R384m — the outstanding balance of the R480m loan — as well as R75m linked to the R185m advanced to MMH, and pay the remaining amount to Maponya.
As part of the settlement, the PIC and BHC were each required to appoint their own independent experts to assess the value of BHC’s 25% stake in SA Home Loans. They would also jointly appoint a third independent expert to verify the valuation of BHC’s shares.
The valuations concluded that BHC’s shares in SA Home Loans were worth R1.5bn.
The settlement envisaged that once the PIC had paid BHC the R1.04bn, the parties would have no further claims against each other.
As part of the settlement, the parties also agreed to withdraw litigation against each other. At the time, the PIC and BHC had about five court cases against each other.
The PIC and BHC signed a share purchase agreement (SPA) on April 16 2024. The court papers show that all the SPA’s suspensive conditions were fulfilled by March 26 last year, and that three days later the PIC was supposed to pay BHC and close the deal.
Notwithstanding every effort to convene the closing meeting, the GEPF [of course, represented by the PIC] refused to attend, virtually or in person. The GEPF has furthermore, up to now, refused to make payment of the purchase price due to BHC. It has further provided no reason for its remarkable conduct
— Kholofelo Maponya in his court papers
The court papers said Kabelo Rikhotso, the CIO and executive director of the PIC and a director of the GEPF, certified that the conditions precedent had been fulfilled as at March 20 2025. He determined that in terms of the SPA, the fulfilment date was March 26 2025 and the closing date March 31 2025.
“Notwithstanding every effort to convene the closing meeting, the GEPF [of course, represented by the PIC] refused to attend, virtually or in person. The GEPF has furthermore, up to now, refused to make payment of the purchase price due to BHC. It has further provided no reason for its remarkable conduct,” said Maponya in his court papers.
The court bundle indicates that, rather than paying BHC the R1bn due, the PIC informed Maponya that his decision to close the distribution bank account into which SA Home Loans deposited BHC’s dividends amounted to a breach of the 2014 loan terms.
BHC had ceded the distribution account to the PIC as security for the 2014 loan. Under the arrangement, each time SA Home Loans paid BHC a dividend, the PIC would dock 95% of it until the loan was repaid in full. The court papers reveal that as of January, the PIC had docked R667m from the distribution account.
Acting through its lawyers, Cliffe Dekker Hofmeyr, the PIC in January advised BHC that closing the distribution account amounted to a breach of the 2014 loan terms. It further stated that officials would seize BHC’s SA Home Loans shares and dispose of them without a court order for R384m — the value of the outstanding loan.
In response, last month BHC filed an urgent application at the high court in Pretoria, petitioning judges to bar the PIC from selling its SA Home Loan shares.
“Unless the courts provide protection to BHC, the GEPF has made it plain that it will within five business days of January 27, take any of the steps set out in the January notice, which includes summarily selling BHC’s shares at a price to cover the outstanding amount under the TLA [term loan agreement]. It has given notice that it will sell an asset worth R1.5bn for a fifth of its value,” said Maponya in his founding affidavit.
The courts ruled in favour of BHC, ordering the PIC to not seize and sell BHC’s SA Home Loans shares. Further, judges interdicted the PIC from enforcing the terms of the 2014 loan.
In his papers, Maponya argues that the SPA displaced and nullified both the 2014 loan agreement and the attendant deed of cession. He contended that the PIC cannot argue that BHC defaulted under agreements that had been extinguished and superseded by the SPA. “The fact is that the SPA (in writing and signed by both parties) amended the Deed and the TLA. I repeat that the SPA amended the Deed,” he said.
Maponya also blasted the PIC for somersaulting and docking the R162.5 dividend that SA Home Loans declared to BHC in 2023
He insisted that he closed the distribution account because it was no longer necessary, as there were no further dividends that would have flowed into the account for docking by the PIC.
Maponya also blasted the PIC for somersaulting and docking the R162.5 dividend that SA Home Loans declared to BHC in 2023.
When the parties signed the SPA in April 2024, they agreed that the PIC would waive its rights to its 95% share of the R162.5 dividend that SA Home Loans had declared to BHC but had yet to pay.
However, when SA Home Loans eventually paid BHC’s dividend, the PIC deducted its 95% share of the dividend under the old loan agreement but refused to pay it over to BHC even after the SPA became effective after suspensive conditions were fulfilled at the end of March last year.
Through legal manoeuvring and procedural tactics, the PIC further went on to block the R150m that SA Home Loans declared to BHC in 2024 from being paid to Maponya’s company.
In September last year, BHC filed a civil suit against the PIC, demanding that the fund manager pay the R1,04bn it owes as part of the settlement mediated by judge Ngcobo. The matter will be heard in court in due course. BHC also demands that the PIC pay the R162.5m dividend.
PIC spokesperson Adrian Lackay said questions on whether the SPA should be implemented, the interpretation of contractual terms, alleged defaults, and the relationship between various agreements, are matters in dispute that are currently being adjudicated by the courts.
“As commenting on matters that are the subject of pending litigation may prejudice the administration of justice and, in certain circumstances, even constitute contempt of court, we believe that it is inappropriate for the PIC to provide further comment or respond to specific questions while these matters remain sub judice,” he said.
“The PIC remains committed to protect and advance the interests of GEPF and its 1.3-million members, while complying with all legal obligations.”
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