The Johannesburg Stock Exchange (JSE) has been summoned to appear before the commission of inquiry into the Public Investment Corporation (PIC), according to Gill Marcus, the inquiry’s assistant commissioner.
Businessman Iqbal Survé alleged that the JSE “scuppered” the listing of his company on the stock exchange – IT company Sagarmatha Technologies.
Survé told the commission he believed there was “sabotage” involved, alleging that rival media companies had exerted influence and convinced the JSE to block the listing of the company.
He further alleged “negative propaganda in the public space” had played a role.
There is also a discrepancy between Survé and the JSE’s story as to why the listing was cancelled.
The JSE said a subsidiary of Sagarmatha did not manage to submit its annual financial statements to the Companies and Intellectual Properties Commission in time for the company to be listed, but Survé said statements were indeed submitted.
PIC’s Lebohang Molebatsi told the commission that Sagamatha’s value was lower than what the company had suggested as their initial public offering, but that the company was not open to changing this.
Molebatsi alleged the company wanted to be valued at almost R40 per share when it’s actual value was closer to R7 per share.
Survé also labelled the PIC’s investment strategy racist during his testimony at the commission, stating that it favoured white-owned and controlled companies at the expense of firms started and managed by black entrepreneurs – himself included.
“I venture to suggest that companies started by black entrepreneurs, that are black-owned and black-managed with black beneficiaries, do not have more than a few R100 billion of the total market capitalisation of R12 trillion of the JSE, thus it is well-recognised that 25 years into democracy, the capital markets in South Africa have not transformed,” said Survé.
(Compiled by Daniel Friedman. Background reporting, Kaunda Selisho)