FIN24 / 30 MAY 2019 - 08:40 / SIBONGILE KHUMALO
The CEO of SA Home Loans has told the judicial commission of inquiry into the Public Investment Corporation that he was constantly badgered by businessman Kholofelo Maponya for payment of a R45m arranging fee he claimed was due to him, following a loan he entered into with the state-owned fund manager.
The contentious fee has dominated evidence heard by the Mpati Commission in recent weeks, with Maponya taking the PIC and SA Home Loans to court over its non-payment.
The commission is investigating allegations of wrongdoing at the PIC, which manages R2.2trn in investments on behalf of public servants.
On Wednesday, SA Home Loans CEO Kevin Penwarden testified that Maponya had relentlessly pursued him for payment, in what he described as "intolerable pressure".
According to Penwarden’s testimony, Maponya’s pursuit of SA Home Loans for the fee was supported by PIC executive assistant Wellington Masekesa, who pinned the demand on a "loose arrangement" that existed between Maponya’s company and the PIC.
The name of former PIC CEO Dan Matjila was also used to exert pressure, with Maponya having said during a meeting that Matjila had agreed he was entitled to a fee at a rate of 1% of the R9bn loan issued in 2015.
Penwarden dismissed the allegation that there was ever an agreement, either from the PIC or SA Home Loans, to pay Maponya the R45m origination fee. Rather, the loan facility was for two special vehicles formed to assist the Government Employees Pension Fund (GEPF) to acquire home loans.
"I was placed under immense pressure by Mr Maponya," said Penwarden.
Penwarden told the commission that he had been struck by the "lack of commercial reasoning associated with the payment of arranging fees on the quantum of the GEPF funding lines."
Maponya is no stranger to dealings with the PIC.
His consortium was brought in when SA Home Loans approached the PIC in 2012, looking a partner to buy the 50% stake held by JP Morgan in the company, after the US firm ran into financial trouble.
According to Penwarden, the PIC said it could only pursue the deal if the included a participation of a B-BBEE firm, and Maponya’s consortium BHC was subsequently introduced. The parties equally split the JP Morgan equity in SA Home Loans.
Maponya then believed that he was entitled to the fee based on his involvement in the JP Morgan equity - a total of R854m, including a R419m extended to his consortium - but the 0.5% fee would be R4.27m, not R45m, said Penwarden.
There appear to be conflicting statements over the alleged involvement by Matjila in the agreement to pay Maponya.
While Masekesa mentioned that Matjila had agreed to the payment, Penwarden referred the commission to a meeting in July 2018, where Matjila "roundly rejected the payment of fees on GEPF facilities to any third party".
"He was abundantly clear on this point, which led me to realise that his name had likely been brought in as part of the concocted proposal."
However, evidence delivered last week by Ian Sinton, special counsel to Standard Bank - the company which holds a majority shareholder in SA Home Loans - indicated that Maponya at some point produced a cession letter bearing Matjila's signature, which showed that GEPF would cede the R45m transaction fee to his company.
The cession letter was later retracted.
Sinton testified the payment saga took another turn when SA Home Loan applied for an additional R10bn facility. He said Penwarden informed him in the late quarter of 2018 that Masekesa and Maponya informed the mortgage provider that the approval for the facility would be granted on condition that the company pays a R95m payment to Maponya's consortium as a transaction origination fee.
"They explained that this was made up of the R45m not paid in 2016….plus R50m, which is 0.5% of the R10bn facility under consideration," said Sinton in his evidence.
Sinton said the condition was regarded as a form of bribery and reported with the Hawks.
Penwarden confirmed that the matter was reported on April 2.
The inquiry will resume on June 18.
LINK : https://www.fin24.com/Companies/Financial-Services/sa-home-loans-ceo-we-faced-intolerable-pressure-over-contested-r45m-fee-20190530
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