PIC MEDIA RELEASE – GOVERNANCE AT DAYBREAK FARMS

1 February 2023

PRETORIA – In October 2022, the Public Investment Corporation (PIC), the sole shareholder of Daybreak on behalf of the PIC’s clients, appointed a new Board, comprising non-executive directors, to manage and control the company, including addressing corporate governance and management concerns that had emerged at the company over time.

The management and control of investee companies, including Daybreak, vests with their boards and management, and not with the PIC, regardless of the extent of its ownership thereof.

Several complaints pertaining to governance and process breaches at Daybreak were brought to the PIC’s attention as a shareholder, by whistleblowers. The PIC supports and handles whistleblowing and whistleblowers in line with the Protected Disclosure Act and its own whistleblower policy and procedures. The PIC’s whistleblower policy and -platform provide for any interested party to raise concerns about how investee companies conduct their business. Such complaints are dealt with in terms of PIC’s internal processes and policies, including testing the veracity of these allegations. This is the case in the Daybreak instance.

When a whistleblower complaint from the management team against the previous Daybreak Board was received by the PIC early in 2021, the PIC initiated a governance review process to consider the complaints. The independent governance review ultimately recommended that measures needed to be taken to reconstitute the Board and strengthen the executive team.

The current Board of Daybreak was appointed in response to the governance review and now has the responsibility to address and improve the internal governance and process issues identified, whilst ensuring that Daybreak remains operationally and financially sustainable, for the benefit of all stakeholders: its employees, clients, service providers, its shareholder, and the clients of the PIC.

The current Board should be given sufficient space and time to do its work, especially given the historic challenges at the company. The Daybreak Board continues to engage the PIC on a regular basis. The PIC will provide the necessary support to the current Board to ensure that all issues raised and identified by the whistleblower are adequately addressed.

Statement issued by PIC Corporate Affairs, 1 February 2023