Harith vindicated by findings on PIC Report

Following several months of deliberations, the Southern African Venture Capital and Private Equity Association (SAVCA), an industry body that represents the interests of private equity and venture capital in Southern Africa, has vindicated Harith General Partners in relation to the findings contained in the Report of the Commission of Inquiry into allegations of impropriety at the Public Investment Corporation (PIC).

Following the publication of the PIC Commission Report in March 2020, SAVCA initiated an investigation to probe allegations of impropriety and possible breach of the SAVCA Code of Conduct in relation to Harith. In response, Harith provided SAVCA with comprehensive documentary evidence to disprove the erroneous findings in the PIC Commission Report.

To this end, the SAVCA independent investigation and findings have confirmed that the establishment of Pan African Investment Development Fund (PAIDF); the subsequent founding of Harith as a fund manager; and its commercial relationships with its institutional investors – were all in line with industry standards and appropriate governance practices.

In a letter addressed to Harith management, SAVCA made the following findings, amongst others:

– SAVCA as an industry association would not provide a view on the commercial terms of a transaction, as these would have been negotiated between the parties.

– The committee is of the view that the legal and fee structures set out in the fund terms are in line with industry standards.

– SAVCA noted that the third-party investors in PAIDF 1 and PAIDF 2 are sophisticated institutional investors. These investors would have sought independent legal advice as well as undertaken a due diligence prior to their formalising their commitment.

– The committee found no contravention of the SAVCA Code of Conduct based on the information contained in the PIC report and the evidence received from Harith.

– As a result, the committee found that no action will be taken against Harith in relation to its SAVCA membership.

SAVCA also stated that it reserves the right to reopen the investigation should the outcome of the PIC-led independent inquiry, as per the recommendations of the PIC Commission Report, find information that is contrary to the Harith submission or should new information emerge at a later stage.