The Public Investment Corporation (PIC), which manages more than R2trn in government employees’ pension money and other government funds, is poised to take disciplinary action against 11 staff members for their part in the decision to invest more than R4bn in AYO Technologies.

The recommendation, in an internal PIC report which Business Day says it has verified, comes as the fallout from the organisation’s decision to take part in AYO’s initial public listing in December 2017 at an inflated valuation, continues to bedevil Africa’s biggest fund manager.

The PIC bought a 29% stake at R43 a share, implying a valuation of R14.8bn. But a few months before, financial statements showed that AYO had total assets of R292m and a book value of R67m.

Since then, the share has traded at far below the original valuation, and the transaction has emerged as one of the most contentious deals being examined at the commission into the PIC. AYO has consistently denied that there was any wrongdoing in the transaction.

Several staff testified at the Mpati commission of inquiry that the investment had the support of former PIC CEO Dan Matjila, who also approved previous investments in companies owned by Iqbal Survé, who holds a large indirect stake in AYO.

Suspended CFO Matshepo More is among the staff members accused of cutting corners and diverting from due process to make sure the deal happened, according a report by the PIC’s internal audit.

Business Day notes the report says that More – who chaired the meeting at which the final investment decision was taken – could face dismissal or a final warning if found guilty. More, who testified at the commission this week, said she had not yet been served with any charges.

However, the internal audit report says she was ‘grossly negligent’ in signing the ‘disbursement memo’, which enabled the release of the funds to AYO, before the PIC’s portfolio management committee, which approves its listed equities portfolio, had approved the transaction.

The 10 other staff members who could face disciplinary action could receive sanctions from dismissal to counselling. Not all of those named in the report have had the opportunity to reply to the allegations.

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