AYO: No grounds for PIC to withdraw its investment, cites 'disinformation campaign' | Fin24
  • Covid-19 Money Hub

    The hub will help answer your business and money questions during the coronavirus crisis.

  • Dudu Myeni

    The former SAA chair has been declared a delinquent director for her role at the national airline.

  • Cigarette Ban

    Govt says emerging research shows smoking leads to more severe cases of Covid-19.


AYO: No grounds for PIC to withdraw its investment, cites 'disinformation campaign'

Feb 26 2019 15:30
Jan Cronje, Fin24

AYO Technology Solutions on Tuesday afternoon said it believes there are no grounds for the Companies and Intellectual Property Commission to order the Public Investment Corporation to recoup its R4.3bn investment in the company.  

It added that the compliance notice - which it says it has not seen - was potentially influenced by a disinformation campaign of "media houses and individual journalists".

It did not say which media houses it was referring to, or how they could have influenced the CIPC to issue the notice. 

AYO was responding to an article published earlier in Business Day, which stated that the CIPC ordered the directors of the state-run asset manager to recover the funds they invested in the IT firm in late 2017.

The CIPC is a body that registers companies, licences business rescue practitioners, and monitors compliance with financial reporting standards, among other things. The CIPC has not yet replied to a Fin24 request for comment.

However, late on Tuesday afternoon, the PIC confirmed that it had received the notice.

It said it was looking into the matter and had already appointed Gwina Attorneys to assist it with a response to the CIPC.

In terms of the compliance notice, the PIC has been ordered to recoup the R4.2 billion it made to AYO within 15 business days from the date of the compliance note, among other things.. The notice was served on February 21. It was also ordered to recover any interest that may have accrued within six months of the compliance notice.

The controversial investment in AYO has been one of the key areas of focus of the ongoing judicial commission of inquiry into the PIC.

On Monday Deputy Finance Minister and PIC chair Mondli Gungubele said the decisions to invest in AYO "completely and blatantly flouted PIC governance and approval processes". In late January the commission heard from a now-suspended assistant portfolio manager at the PIC that the transaction was a “foregone conclusion” with former CEO Dan Matjila using his authority to overrule concerns about the deal. 

AYO has consistently hit back at critics and allegations of wrongdoing, saying the PIC's investment is sound. 

'We still haven't seen it'

In a notice to shareholders on Tuesday afternoon AYO said it had not seen the compliance notice mentioned in the Business Day article. 

"Both the PIC and AYO should have been consulted and had sight of the notice," it said.

The company, in which businessman Iqbal Survé holds an indirect stake, said it was not consulted prior to the notice being issued.  It argued the notice was "potentially biased and influenced by a disinformation campaign by media houses and individual journalists".

"AYO further believes that CIPC, by failing to inform and provide it with a copy of the Notice to the PIC, has acted contrary to the provisions of the Promotion of Administrative Justice Act."

It also questioned whether the CIPC could undertake independent valuations of companies, and said that – based on the figures quoted in the article – the CIPC had not calculated its annual turnover correctly. 

The JSE said it would consider questions by Fin24 around how the notice affects AYO's listing.  

The news had done little to dent AYO's share price by early Tuesday afternoon. The JSE-listed firm's shares were changing hands at R17.60 at 13:23 on Tuesday, down 2.17%.  

cipc  |  ayo  |  iqbal surve


Company Snapshot

Voting Booth

How has Covid-19 impacted your financial position?

Previous results · Suggest a vote