PIC lost billions buying into Steinhoff without following procedure - Dlamini

The PIC spent R9.3 billion in the venture five months before the collapse of the international retailer.

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JOHANNESBURG - The Public Investment Corporation's (PIC) acting head of legal Lindiwe Dlamini has testified that the PIC lost billions by buying Steinhoff shares after failing to follow procedure.

The PIC spent R9.3 billion in the venture five months before the collapse of the international retailer, resulting in the state fund manager having to write off R4.3 billion of its investment.

Dlamini said the PIC failed to do conduct due diligence when it came to the Steinhoff deal it entered into with BEE company Lancaster 101.

Dlamini said legal warned the fund manager that it was exposed.

“From the security perspective, we’re of the view that this exposes the PIC in that the security proposed in that L102 structure is insufficient to cover the PIC’s full exposure on the L101 loan. To mitigate this risk, the PIC intends to negotiate a share hold and upside participation in R102 for the risk taken as a result of subordinating the PIC security in L101.”