South Africa is investigating a 9 billion rand ($629 million) loan made by the Public Investment Corp. to a black empowerment partner of embattled retailer Steinhoff International Holdings NV, according to people familiar with the matter.

The probe will seek clarity on why Africa’s largest money manager decided to later sell its collateral on the loan to Citigroup Inc., said the people, who asked not to be identified as the details are private.

The result was that the PIC was among those that lost heavily from Steinhoff’s share price collapse in the wake of an accounting scandal a year ago.

President Cyril Ramaphosa ordered a commission to investigate a number of investment decisions made by the PIC, which has more than 2 trillion rand under management and is the administrator of state-worker pension funds.

Allegations surrounding some deals led to the resignation of Chief Executive Officer Daniel Matjila last month. 

The Government Employees Pension Fund, whose funds are administered by the PIC, has written off a 4.3 billion rand investment in Lancaster, according to the people familiar with the matter.

“The commission of inquiry is running its own processes and the PIC is careful not to interfere with the commission’s work,” the PIC said in an emailed response to questions. Citigroup declined to comment.

“I assume this is one of the investments that the PIC made that will get attention at the inquiry as it was a big investment, rather than a specific probe into this matter,” said Jayendra Naidoo, founder of Lancaster.

Plunging Shares

Steinhoff, like many South African companies, sought to sell a stake to a black-owned partner as the government pressures businesses to make up for discrimination during apartheid. The probe into the PIC loan to Lancaster was first reported by Johannesburg’s Business Day newspaper.

Lancaster took out loans to buy shares in Steinhoff to take part in the 2017 spin off of the retailer’s African operations, now known as Pepkor Holdings Ltd, said the people. Naidoo is chairman of Pepkor.

Steinhoff shares are down almost 97 percent since the owner of Conforama in France and Mattress Firm in the U.S. announced accounting irregularities and the departure of its CEO in December 2017. The company is being sued by a number of investors, most notably former chairman and billionaire Christo Wiese.