Investigators found a pattern of diffused accountability and absence of documented decision-making at the highest echelons of the Public Investment Corporation (PIC) in the lead-up to the decision to sign a cheque for more than R400m to settle a dispute with a BEE investor at Lanseria International Airport. This as suspicion wells at the company that some of its staffers deliberately weakened its case against BEE outfit Acapulco at the arbitration phase — with the entity eventually shelling out the money to the outfit.A PwC report dated May 18 notes the PIC’s erstwhile chief investment officer Kabelo Rikhotso, who parted ways with the asset manager in March after a period on suspension, did not avail himself for an interview.“The findings point not to deficiencies in the PIC’s agreements or governance framework, but rather to omissions, conduct and discretion exercised by various officials and advisers,” PwC concluded.The PwC investigation was centred on the R411m paid to Acapulco Trade and Invest in October last year.Acapulco in 2013 received a R333.2m loan from the PIC to buy a 25% stake in Lanseria.Under the terms of the deal, Acapulco was expected to use reasonable commercial endeavours during the term to raise funds to refinance a portion of the capital loan amount. The final repayment of the capital loan amount was to fall on the 10th anniversary of the first advance date, which came in the latter part of 2023.Acapulco defaulted on the loan, which had ballooned to about R600m, including interest. The PIC then moved to perfect its security by taking transfer of Acapulco’s shares in Lanseria.The issue of the valuation of the stake then came into play. The PIC and Acapulco hired professional services firm BDO to conduct the valuation.The report by BDO was rejected by both parties, with the firm’s mandate terminated in October 2024.A month later, the parties appointed Crowe to conduct the valuation. Crowe in January last year produced its final report, which the PIC disagreed with. Crowe’s valuation was an outlier in that it was far removed from historical valuations of the asset.Ultimately, the PIC’s view was that Crowe’s valuation inflated the value of Lanseria by about R1.7bn.Read: SIU called in as PIC’s Acapulco airport dispute gets messierThe essence of Crowe’s valuation put Acapulco’s stake in Lanseria at about R1bn, opening the door for the company to walk away with a tidy sum, even after losing its shares to the PIC over the R600m debt.The PIC contended that the Crowe report contained fundamental errors, particularly and most glaringly in the form of double counting.However, Crowe stuck to its guns and did not change its position without even considering the PIC’s concerns.The PIC then, in writing, informed Acapulco in February that it rejected the Crowe valuation.After a prolonged legal process that included an arbitration that ruled in favour of Acapulco, the PIC in October paid Acapulco to settle the dispute.Read: CEO Dlamini and CIO Van Heerden gone — turmoil at PICThe PwC report found key officials had dropped the ball. “The investigation identified that, in respect of several key decisions, including the termination of BDO, the appointment of Crowe, and the election to proceed with arbitration under expedited rules, no single individual within the PIC, including Ms Lindiwe Dlamini, Mr [Bothwell] Hlahla, or Mr [Thando] Mziba, assumed clear ownership or accountability,” the PwC report reads.“When questioned, each of these key role players either expressly denied making or instructing these decisions or indicated that their role was limited to providing input or executing instructions received from others.“Although per the governance frameworks, Mr Rikhotso was allocated overall responsibility, the findings reflect that he is notably absent from the documented decision-making process and was not available for consultation with us.”Despite their denials, Rikhotso, Hlahla, Dlamini and Mziba were identified as the main role players involved in the transaction and decisions taken.The PIC board has since asked the SIU to probe the transaction. The entity this week suspended its CEO, Patrick Dlamini, and asked its acting chief investment officer, August van Heerden, to relinquish his role.The own goals by the PIC flagged by PwC included the following:The PIC only engaged its finance function after Crowe issued its final valuation and presented this to the valuation committee, despite concerns being identified by them regarding the draft valuation.The PIC agreed to conduct the arbitration under expedited rules, which reduced the time available for procedural steps, including the preparation and filing of expert and factual witness statements.The PIC appointed an apparently unqualified valuation expert to represent them in the arbitration.The PIC’s legal team did not consider calling Crowe to give evidence on its own valuation during the arbitration proceedings.Business Day