Parliament Presses PIC Over Metrofibre Deal and R1.4 Billion Indemnity

Members of Parliament have intensified scrutiny of the Public Investment Corporation’s handling of its investment in MetroFibre Networx, focusing on a R1.4 billion legal indemnity issued to the company and the proposed buyback of shares held by black-owned investment vehicle Levoca 805.

During a sitting of the Standing Committee on Finance, ATM president and committee member Vuyo Zungula questioned why the PIC extended a legal indemnity to MetroFibre “without board approval and without a clear rationale,” noting that the transaction “makes no commercial sense when MetroFibre has already generated over R100 million for pensioners within a year.”

Zungula further highlighted that Levoca 805 had remedied all issues cited in the PIC’s breach notice and asked PIC CEO Patrick Dlamini whether the PIC still intended to proceed with acquiring Levoca’s shares despite those remedies being met.

Dlamini confirmed that Levoca had settled the outstanding R129,000 legal fee to Bowmans Attorneys and that the PIC had now received a draft valuation of MetroFibre.

“We are reviewing the valuation and considering our next steps,” he told MPs.

UDM leader Bantu Holomisa raised further concerns about governance and oversight, stating: “A case of fraud and corruption has been opened against the PIC’s head of legal, Ms. Lindiwe Masina Dlamini. Why has she not been suspended if Mr. Thabo Moshikara was suspended under similar circumstances?”

Holomisa also warned that the matter has broader implications for public trust and the investment environment.

“This issue affects public funds, beneficiary confidence, and the broader digital infrastructure sector. Parliament must satisfy itself that due process is being followed and that there are no irregularities delaying the conclusion of the transaction.”

Further questions were raised about the PIC’s leaked draft valuation, which reportedly suggests that a loan of approximately R697 million extended to Levoca 805 has resulted in a potential buyback figure more than R320 million higher within just over a year. Members of Parliament stressed the need for transparent disclosure to confirm whether this valuation serves the best interests of the Government Employees Pension Fund. Holomisa added that full clarity is essential to ensure accountability: “South Africans have witnessed the consequences of poor oversight before. These issues must be ventilated fully and transparently in Parliament.”

Parliamentarians emphasized that resolution of this matter is urgent, as delays affect both the PIC’s investment posture and the ability of stakeholders to conclude pending commercial transactions connected to MetroFibre’s valuation.

EDITOR – The Bottom Line:

The Leak: MPs challenged the PIC on a leaked valuation report that suggested a loan linked to a shareholder (Levoca 805) may now require a buyback significantly higher than the original loan amount.
The Implication: This raises fears that the PIC may have overvalued its investment in MetroFibre Networx, which could potentially result in a loss for the pension fund.
The parliamentary investigation is directed at the PIC’s internal processes and fiduciary duty in managing its investment, rather than allegations of operational fraud by MetroFibre Networx itself.

Video: Parliament Presses PIC Over MetroFibre Deal and R1.4 Billion Indemnity