GOVERNANCE WATCH
By InsidEntity Editorial Desk · Jul 25, 2026 · 7 min read
The number is on the parliamentary record, confirmed by the Minister of Finance in a written reply. The Public Investment Corporation’s Isibaya Fund invested more than R18.2 billion across 23 companies that ultimately recorded an internal rate of return of minus 100%, meaning the investments lost all of their value. Not underperformed. Not lagged a benchmark. Returned nothing.
This is the second part of InsidEntity’s examination of the PIC, and it is the part that converts the first from a governance story into a rands-and-cents one. Part one covered the boardroom: six non-executive directors resigning in a week, followed on 23 July by the board chairman, Deputy Finance Minister David Masondo, who resigned with immediate effect ahead of a shareholder meeting called for 27 July; alongside suspended executives, an FSCA investigation, and a Company Risk Rating of 2.31, Caution, the lowest this series has recorded. This part covers what the structure that rating describes has historically cost the people it invests for.
What the Isibaya Fund is, and what the reply disclosed
The PIC manages roughly R3.6 trillion for public sector clients including the Government Employees Pension Fund, the Unemployment Insurance Fund, and the Compensation Commissioner Fund. Most of that sits in listed equities and bonds. The Isibaya Fund is the PIC’s specialised vehicle for unlisted developmental investments, the portfolio where capital is deployed into private companies with a mandate that blends financial return and developmental impact, and the portfolio where the discipline of a listed market’s daily pricing, public disclosure, and analyst scrutiny does not apply.
The disclosure came in a parliamentary reply to questions from DA MP Andrew Bateman to the Minister of Finance regarding the PIC’s unlisted investment portfolio. The reply listed the investments that have gone to zero:
| Company | Investment | IRR |
|---|---|---|
| AfriSam | R11.038 billion | -100% |
| VIA Bounty | R1.374 billion | -100% |
| Independent Media | R888 million | -100% |
| Allied | R777 million | -100% |
| Urban Lifestyle | R499 million | -100% |
| S&S Refinery | R492 million | -100% |
| Daybreak | R483 million | -100% |
| Musa | R450 million | -100% |
| Educor Property | R400 million | -100% |
| Educor | R355 million | -100% |
| Concor | R315 million | -100% |
| Amalooloo | R188 million | -100% |
| Solar Cap-Orange | R168 million | -100% |
| Bayport | R149 million | -100% |
| Eden Gardens | R130 million | -100% |
| VBS | R110 million | -100% |
| Magae Makhaya | R83 million | -100% |
| Yalu | R75 million | -100% |
| ZarX | R68 million | -100% |
| Berlin Beef | R60 million | -100% |
| Ekuzeni | R52 million | -100% |
| Naturecell | R39 million | -100% |
| LA Crushers | R30 million | -100% |
| Total | R18.223 billion | -100% |
Source: parliamentary reply by the Minister of Finance, as reported by BusinessTech, June 2026.
A minus 100% internal rate of return is the floor of the scale. It indicates that investors failed to recover any of their original capital: a business collapses without returning value to shareholders, a project is abandoned before generating revenue, or assets become worthless with no opportunity to recover losses. Twenty-three separate times.
Two pieces of context keep the number honest in both directions. First, the overall Isibaya portfolio, dating back to March 2006, has an IRR of 4.25%, so the fund as a whole is not worthless; other investments have returned capital and more. Second, 4.25% over two decades remains well below long-term market returns, and below inflation for much of the period, which means that even including its successes, the developmental portfolio has cost its beneficiaries the difference between what their money earned and what it would have earned almost anywhere else.
The names you already know
Most of the 23 are unknown outside the reply. A few are not, and their public histories illustrate the range of ways an unlisted investment reaches zero. AfriSam, the cement producer, is the giant of the list at R11 billion, more than the other 22 combined, a position built through leveraged restructurings of a business that never recovered its pre-crisis economics. VBS Mutual Bank collapsed in 2018 in one of South Africa’s most notorious banking failures, with curatorship, criminal prosecutions, and convictions following. Educor, the private education group, had colleges deregistered by the state. Daybreak, the poultry producer the PIC owns outright, entered business rescue in 2025 amid worker unrest and animal-welfare headlines; the parliamentary table records R483 million at minus 100%, while the DA’s statement puts the PIC’s total exposure at approximately R2 billion once subsequent funding is counted. Concor and Independent Media appear on the list at R315 million and R888 million respectively, per the minister’s reply.
Different industries, different decades, different failure modes. One common feature: every one of them was an unlisted position, priced privately, monitored privately, and disclosed to the beneficiaries whose money it was only after the value was gone.
The thread that connects the two halves of this story
The Mpati Commission of Inquiry reported in 2020, and its findings sit under both halves of the PIC’s July. The commission concluded that the institution had been affected by political interference, weak oversight and governance failures, with some of the most serious concerns centred on the Isibaya Fund’s unlisted investments, where weaknesses in governance and internal controls left the fund vulnerable to poor decision-making and inadequate due diligence. Among its recommendations: depoliticise board appointments, including ending the automatic chairmanship of the Deputy Minister of Finance.
Six years later, the losses the commission warned about are quantified on the parliamentary record at R18.2 billion, and the board structure the commission recommended changing is the one that spent this month in crisis, with the political shareholder and the politically chaired board on opposite sides of a boardroom standoff. The commission’s report is the rare document that predicted both halves of the same news cycle. It was implemented in neither.
The questions being asked, and what answers them
The parliamentary questions now tabled ask, for each transaction: the investment rationale and projected returns presented to decision-makers; the due diligence performed and whether known risks were overlooked; which executives, investment committee members and board members approved each deal and whether conflicts were declared; who the shareholders and beneficiaries were; how each investment was monitored, whether PIC-appointed directors did their job, and whether further funding was advanced despite clear signs of distress; and whether investigations have produced findings, referrals, or recovery actions.
Set political affiliation aside, because whoever asks them, these are not political questions. They are governance questions, and they are asked in the past tense because the information was never assembled in the present tense. Every item on that list is a fact that existed, somewhere, at the moment each investment was made: a director’s other interests, a board seat filled or vacant, a distress signal preceding a further advance. Reconstructing them now requires parliamentary process, forensic work, and years. Observing them then required only that someone was recording who sat where, who approved what, and what the record showed before the next cheque.
That is the working thesis of this platform, and the Isibaya list is its costliest South African illustration. The signals are always there before the loss. A director record shows whether the PIC’s appointed directors were present on the boards of investee companies, what else those directors carried, and when they arrived and left. A watchlist shows a company taking new funding while its indicators deteriorate. None of it prevents a bad investment on its own. All of it changes when the questions get asked: before the write-off, not six years and one commission after it.
What to watch
Three processes carry this forward. The Minister’s replies to the detailed questions will determine how much of the approval and monitoring record becomes public, transaction by transaction. The board question is now acute: with the chairman, Deputy Finance Minister David Masondo, having resigned with immediate effect on 23 July, the shareholder meeting called for 27 July was set to consider a board that had already largely dissolved itself, and the composition of whatever board is constituted next, in particular whether its chair is, for the first time, not a serving politician, will show whether the Mpati Commission’s recommendation is finally implemented by events after it was not implemented by choice. The PIC Act amendment process is the concrete version of the same question: the DA announced on 20 July that it will propose a bill to address governance at the PIC, legislation that would give effect to the Mpati Commission’s recommendation on board and chair selection, and whose passage, amendment, or failure will restructure, or preserve, the institution at the centre of both halves of this story. And recovery: whether civil action is taken on any of the 23, and whether anyone who earned fees or bonuses on the way into these positions is asked to account on the way out.
The PIC’s rating, its board record, and this month’s events are on the platform, updating as they land. A parliamentary reply tells you what was lost. The record tells you who was in the room while it was being lost, which is the question every process now underway is trying to answer after the fact.
Know your entity. This article reports figures confirmed on the parliamentary record and positions attributed to their sources; the appearance of any company on the disclosed list reflects investment performance data and implies no finding of wrongdoing by that company or any individual. This is independent research, not financial advice.