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Axed Fedusa head says workers can still benefit from AYO shares

May 20 2019 08:36
Jan Cronje

Dennis George, the dismissed general secretary of Fedusa, has responded to his axing by saying that the trade union federation can still benefit by taking up shares in IT company AYO Technology Solutions.

George was dismissed on Friday after being suspended in late February. 

Last week Fedusa said its National Executive Council decided to fire George after meeting to considering the recommendations of an internal investigation into George and shares in AYO.  The council "unanimously resolved to dismiss George based on findings of serious misconduct," it said. 

In a statement on Monday morning George said that the union could still take up an allocation of 11 million AYO shares which are housed in a company called Difeme investments. George is the sole director of Difeme, according to the Companies and Intellectual Property Commission. As of Monday morning, 11 million AYO shares were worth about R120m. 

George said the shares were placed in the company as Fedusa did not have a investment company to house them, and he never intended to benefit personally from the shares.  

"My motivation was simply that these shares would assist Fedusa affiliates in building worker participation in the economy, that the affiliates would be financially strengthened and that workers would have representation on the board of the largest black ICT company in the country, AYO," he said. 

He criticised what he called "disinformation" about his role, saying he was a "facilitator". 

George is a non-executive director at AYO. The IT company's funding by state-run asset manager the Public Investment Corporation has come under the spotlight at the judicial commission of inquiry into the PIC. The commission is investigating allegations of wrongdoing at the asset manager, which manages R2.2trn in investments on behalf of public servants.

The PIC invested R4.3bn in the AYO when it listed, buying 29% of its shares and valuing the group at R14.8bn. The share price has since declined from its listing price of R43 a share to R10.99 a share. 

Last week the group's chief investment officer, and former director, Abdul Malick Salie testified that AYO's valuation was "stretched out" so that it appeared to be worth more than it was in reality before its listing. 

The inquiry has also previously heard from AYO's former CEO Kevin Hardy that the group's interim financials were tampered with. AYO, in a statement, denied any wrongdoing. The JSE, meanwhile, ordered AYO to engage with its auditors on an urgent basis to verify its earnings. 

* Update: This article has been updated to reflect that Salie is a former director of AYO. 

fedusa  |  ayo  |  dennis george
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