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Months after setting up a task team to probe the $445-million sale of Kapa Biosystems, the Department of Science and Technology is still proceeding with investigations, Science and Technology Minister Naledi Pandor’s office said today.
It follows the setting up of a task team last year by the department to investigate the deal in which the Technology Innovation Agency (TIA) sold its 49% stake to US shareholders for $4.93-million. The company was subsequently sold to Roche for $445m on 30 November 2015 (an amount which is disclosed in the Swiss pharmaceutical company’s 2015 annual report).
Pandor’s spokesperson Lunga Ngqengelele said he was unable to comment at present as investigations were still continuing. He added that because of the sensitivity of the issue, both the Department of Science and Technology and the Technology Innovation Agency are making sure that everything is “done right as they would not want to lose this case on a technicality”.
‘Department, TIA making sure everything is done right as they wouldn’t want to lose case on a technicality’
Pandor on 30 September last year revealed in a response to a question from DA MP Annelie Lotriet that her department had set up a task team to investigate the deal.
At the time she said the task team was still determining the facts of the matter and the most appropriate course of action and added that she would advise the cabinet on the outcome of the assessment conducted by the task team. At the time she said the date for when the investigation would be finalised could not be “ascertained as the assessment is still ongoing”.
When contacted by Ventureburn, Lotriet said she had not heard any further details on the investigation since September last year.
The deal is possibly the second biggest acquisition ever by a South African startup. Webber Wentzel senior associate Aalia Manie, who was involved in the deal, said the acquisition was one “of the biggest success stories” for SA startups.
However when asked to comment on what stage of the deal she was involved in and whether her role included the sale of the TIA stake to US investors, Manie said she was under “strict confidentiality restraints”. She referred Ventureburn to Kapa Biosystems to respond to any questions.
Ventureburn however was unable to get hold of Kapa Biosystems founder Paul McEwan by time of publishing this story.
A local investigative journalism news website uSpiked in April last year published details of the deal, noting that the deal is also being investigated by US authorities. The three-year old site is run by African investigative journalist Mark Thomas (he declined to say where he is originally from).
When contacted by Ventureburn, Thomas argued that South African tax payers were ripped off in the deal as hundreds of millions of dollars should have flowed to the TIA by the American investors instead of the less than $5-million the state agency accrued from selling its stake to US investors.