GroCapital Holdings responds to Business Report allegations against the Prudential Authority

On 25 September 2018, an article entitled “Bank Regulator under scrutiny” was published in Business Report. GroCapital Holdings Limited (“GroCapital Holdings”), on its own and on behalf of its shareholders, AFGRI Holdings Proprietary Limited (“AFGRI”), the Public Investment Corporation SOC Limited (“PIC”) and Fairfax Africa Investments Proprietary Limited (“Fairfax Africa”), hereby wishes to release the following statement regarding the article to set the record straight:

GroCapital Holdings views the article and the statements and comments made by the author of the article in a serious light and distance ourselves from them in the strongest possible terms.

We further assert that the contents of the article are conjecture and that the inferences, conclusions and comments made by the author regarding the independence of the Prudential Authority (“PA”) are those of the author only and not those of GroCapital Holdings and/or its shareholders.

We can confirm that no interviews were requested by the author nor granted by GroCapital Holdings and/or its shareholders, prior to the publication of the article. The author furthermore did not approach GroCapital Holdings and/or its shareholders for their comments after the article was published.

We are of the view that the author quoted selectively, and out of context, from the records of the Competition Commission Tribunal hearing. The questions posed to Mr le Grange, Ms Simpson and Mr Bloem by the Tribunal members at the time of the hearing were done so purely to clarify certain aspects of the transaction, and to provide the members with comfort that the transaction was approved by the Minister of Finance and the South African Reserve Bank.

We therefore fully agree with the statement by the PA in the article that “these allegations of “match making……to include the PIC as a party to the acquisition of shareholding in banks, are not true.”

GroCapital Holdings categorically denies that the PA introduced the PIC as a prospective shareholder to GroCapital Holdings or suggested, inferred or implied that if the PIC was included as a shareholder, the acquisition would stand a better chance of being approved. The PIC has in fact been a substantial shareholder of AFGRI since 2014.

All of AFGRI’s shareholders were invited by AFGRI to participate directly in the acquisition of a stake in the South African Bank of Athens Limited  through GroCapital Holdings at the inception of the proposed transaction in October 2016. Both the PIC and Fairfax Africa accepted such participation. From a governance perspective, the PIC presented the proposed transaction to and obtained approval from its relevant sanctioning committee/s to participate in the SABA acquisition.

We reaffirm the fact that no third party facilitated the transaction nor fostered the relationship between the transacting parties. To the contrary, it was GroCapital Holdings which requested SARB to allow the PIC to participate in the SABA acquisition.