https://www.miningweekly.com
Africa|Business|Energy
Africa|Business|Energy
africa|business|energy

PIC lost $333m through 'poor investment' in Erin Energy

23rd July 2019

By: Bloomberg

  

Font size: - +

The former head of Africa’s largest money manager said the company lost $333-million after a “poor investment” in Erin Energy Corporation, accusing the US oil explorer of deliberately withholding information about its prospects ahead of a listing in Johannesburg.

South Africa’s Public Investment Corporation (PIC) took part in a private placement in what was then known as Camac Energy ahead of the Houston-based company’s secondary listing in 2014, former PIC CEO Daniel Matjila told a commission probing allegations of wrongdoing at the fund manager. However, technical problems at a rig and the falling oil price made the business unviable, he said, and Erin filed for bankruptcy last year.

“You cannot get everything right in investments,” Matjila said. While the $333-million is a “fraction” of the R2.1-trillion overseen by the PIC, “it doesn’t mean it’s insignificant,” he added.

Matjila is in his eighth day of testimony to the commission, which is looking into a number of PIC deals that have been flagged as potentially dubious. The money manager is responsible for the bulk of South African civil-servant pension funds.

Jannie Lubbe, the commission’s evidence leader, asked Matjila if he knew that Erin’s founder, Kase Lawal, was a close friend of former South African President Jacob Zuma, who has been linked to numerous allegations of corruption over his nine-year term. Matjila said he’d read about it in newspapers and seen pictures of them together.

Despite the issues with Erin’s rig and the oil price, the PIC guaranteed a $100-million bank loan Erin took from Mauritius Commercial Bank in 2016. When Erin filed for bankruptcy, it had already drawn down $63-million of that. Matjila said the PIC later realized there was a lot Erin didn’t disclose to the investor or the JSE.

Edited by Bloomberg

Comments

Showroom

Booyco Electronics
Booyco Electronics

Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...

VISIT SHOWROOM 
SABAT
SABAT

From batteries for boats and jet skis, to batteries for cars and quad bikes, SABAT Batteries has positioned itself as the lifestyle battery of...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.078 0.114s - 91pq - 2rq
Subscribe Now