Incredible story of how the PIC paid a company R411 million after the same company failed to repay a loan

The Public Investment Corporation (PIC), acting on behalf of the Government Employees Pension Fund (GEPF), granted a loan of R333 million to a company called Acapulco in 2013.

When Acapulco could not repay this loan 10 years later, as required by the loan agreement, the PIC paid it R411 million.

This may seem like a fantasy novel, but this is exactly what happened, Finance Minister Enoch Godongwana told Parliament.

Godongwana explained that, on 27 June 2013, the GEPF, represented by the PIC, concluded a loan facility agreement with Acapulco.

The GEPF loaned Acapulco R333 million to acquire a 25% stake in Lanseria Holdings. As surety for this loan, Acapulco pledged its shares in Lanseria.

The loan agreement stated that Acapulco was to service the debt and make the final payment on the tenth anniversary of the first advance date.

Simply put, Acapulco had to repay the R333 million loan from the Government Employees Pension Fund within 10 years. This did not happen.

On 11 November 2023, Acapulco defaulted on paying the final amount. It wanted to restructure the debt, but the PIC rejected this request.

On 16 May 2024, in accordance with the terms of the loan facility agreement, the PIC actioned taking the Lanseria shares which Acapulco pledged for the loan.

The equity transfer to the GEPF took place on 24 June 2024, following the approval by the Competition Commission.

There was one issue which had to be addressed. This was the final determination of the valuation of Acapulco’s share in Lanseria.

There was a dispute over the valuation, and the parties agreed to private arbitration as the dispute resolution mechanism.

The PIC and Acapulco concluded an arbitration agreement that included, among other provisions, that the arbitrator’s decision shall be final and not subject to appeal.

To the surprise of many stakeholders, the arbitration panel ruled on 17 September 2025 that the PIC had to pay Acapulco R411 million.

The PIC duly paid this amount into the trust account of Mabotja Attorneys, who represented Acapulco.

The PIC then obtained independent legal advice from two senior counsels on the merits of a potential review of the arbitration award.

The legal opinion found that there were no sustainable grounds to demonstrate bias, gross irregularity, jurisdictional error, or material misdirection.

“On this basis, the prospects of success were assessed as low,” Godongwana said in a statement to Parliament.

Despite accepting the ruling and making the payment, the Finance Minister admitted that it was in the best interest of the GEPF.

“The PIC effected the payment in compliance with the prescriptions of the arbitration award,” Godongwana said.

“For this reason, the PIC conducted another independent review of the Lanseria transaction.”

The matter has subsequently been referred to the Special Investigating Unit for investigation.