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Deadline to recoup PIC investment in AYO extended to 60 days

Mar 19 2019 19:53
Sibongile Khumalo

The Companies and Intellectual Property Commission and the Public Investment Corporation have reached an agreement to extend the deadline for the asset manager to recoup the R4.3bn it invested in AYO.

The deadline will now be extended from 15 days to 60 days, evidence leader Jannie Lubbe told the PIC inquiry on Tuesday. He said the parties had reached the agreement following last week’s court application.

The PIC had gone to court to seek an extension of the deadline, which was set to expire on March 14. Earlier this month, the PIC revealed that the CIPC had served it with a compliance notice to recover the funds it had invested in AYO Technology Solutions ahead of its debut on the JSE in December 2017.

"The CIPC has agreed on an extension of the time limits of that notice, from 15 days to 60 days," said Lubbe.

The state-owned asset manger bought a 29% stake in the technology firm at R43 a share, in a transaction which has been described by several PIC executive managers as conducted without following due process. 

AYO shares have rapidly lost value since listing, and are currently trading at around R16.

Interdict

AYO, for its part, will on Wednesday head to the High Court in Pretoria to seek an interdict against the CIPC in a bid to prevent it enforcing the compliance notice and prohibit the PIC from complying with the notice.

In its founding affidavit before the court, AYO described the CIPC decision as "unprecedented", stating that it was "kept in the dark" about the enforcement of the notice.

The company further stated that neither the CIPC nor the PIC had "provided any insight into the process by which AYO is to allegedly return the R4.3bn of invested monies."

In a statement submitted before the commission, Lana van Zyl, CIPC Senior Manager of Corporate Governance, Surveillance and Enforcement, said the watchdog’s decision to issue the PIC with a notice to recoup funds was not informed by any external influence.

She said the watchdog arrived at the decision following evidence presented at the inquiry, particular the submission by Victor Seanie, who testified in January. 

Seanie, an assistant portfolio manager who was suspended in January, was one of the PIC officials involved in the valuation of AYO. He told the commission that former CEO Dan Matjila used his influence to push through the deal and signed the subscription agreement before it was approved by the PIC's portfolio management committee.

ayo  |  pic commission of inquiry
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