The former head of Africa's largest money manager said the company lost $333 million after a "poor investment" in Erin Energy Corp., accusing the U.S. oil explorer of deliberately withholding information about its prospects ahead of a listing in Johannesburg.
South Africa's Public Investment Corp. 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," Mr. Matjila said. While the $333 million is a "fraction" of the 2.1 trillion rand ($152 billion) overseen by the PIC, "it doesn't mean it's insignificant," he added.
Mr. 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 Mr. 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. Mr. 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. Mr. Matjila said the PIC later realized there was a lot Erin didn't disclose to the investor or the JSE.