When to suck or blow – Ayo responds in kind to PIC

There’s a right-royal legal thrust and parry going on between Dr Iqbal Surve’s Ayo Technologies and the PIC right now, each one asserting the other has damaged its assets and reputation. It’s a far cry from the halcyon days in 2017 when PIC CEO, Dan Matjila, and Dr Surve’ were on very congenial terms, shaking on a deal that saw the PIC invest R4.3bn in Ayo Technologies, a deal gone very sour with time. The Mpati Commission has heard that Ayo flaunted its own procedures, with its’ chief investment officer admitting that the company valuation that resulted in the PIC paying that price was a mere “thumbsuck.” Enough of a thumbsuck to render angry public sector pensioners quite faint in fact. Another former Ayo chief investment officer told Judge Mpati that the valuation was possibly inflated 14-fold. That’s quite an oxygen-depleting puff, especially when you’re talking in billions. So the PIC wants its’ R4.3bn back and Dr Surve’ wants to counter-sue for undisclosed billions for reputational and thus trading damage. Somebody’s telling some very large porky pies. The below is a translated article from Die Burger’s reporter Elvira Wood. – Chris Bateman

Survé’s Ayo wants to sue PIC ‘for billions’

Translated by Ed Herbst*

Billionaire Dr Iqbal Survé’s technology company Ayo Technology Solutions wants to sue the Public Investment Company (PIC) for ‘what is expected to be billions of rands’.

The company said in a typically combative statement on Thursday it had had ‘enough of the accusations of allegations based on hearsay and erroneous facts which were fed to the market through a disastrous propaganda war by many of the South African media.

He said PIC was welcome to approach the courts if it believed that the company was indeed guilty of wrongdoing.

However, upon enquiry it seemed that this statement was a reaction to legal action taken by PIC against Ayo.

Also read: Insider implicates Iqbal Survé in Ayo’s “doctored” valuation

Deon Botha, head of corporate affairs at PIC, stated that PIC had lodged papers with the High Court in Cape Town on 29 May suing Ayo for a refund of its investment of R4.3bn in December 2017.

PIC stated it would return the shares that it had purchased with these funds to Ayo.

In the statement Botha further said that the corporation’s claim was based on Ayo having created a misrepresentation when it had approached PIC to invest in it. He also said there were legal aspects of the transaction that were in dispute.

‘The sheriff served the summons to Ayo’s registered address on the very same day (29 May). A copy of the summons was also delivered to Ayo’s attorneys.’

Over the past four months various witnesses testified before the commission, led by Justice Lex Mpati, how PIC had allegedly disobeyed its own procedures in approving an investment of R4.3bn in Ayo in December 2017.

Also read: PIC moved too fast on Ayo, says suspended Seanie

Questions were also asked about the company’s valuation which resulted in PIC paying R43 per share.

Siphiwe Nodwele, former chief investment officer at Ayo, previously testified that this company had likely been worth only R1bn at the time of its listing and not R14.8bn as per the official valuation.

Some of the Ayo employees also testified that all was not in order with the company’s books.

This drew the attention of the JSE, and on 10 April it requested that Ayo obtain an audit opinion of its 2018 and 2019 unaudited interim results.

Earlier in May Malick Salie, Ayo chief investment officer, admitted before the commission that the market valuation of the company before its listing in December 2017 had been a ‘thumbsuck’.

Salie further testified that the audit that was presently being done on JSE instruction, had revealed mistakes with the Ayo figures, but also that it didn’t include its income from interest of R25m.

Ayo, however, still denies the allegations.

‘The unfortunate comment by Mondli Gungubele, PIC chairman, and various officials of the institution that are now entering public domain, has caused serious damage to Ayo’s reputation,’ the company said in its statement on Thursday.

‘PIC harmed the business of Ayo and its own investment in this company.

‘In addition, the conduct of PIC and previous Ayo chief executives who recently testified before the commission of inquiry into events at PIC, resulted in Ayo experiencing significant problems in finalising its transactions. It is also experiencing problems in doing its business unhindered. Ayo, its employees, clients, shareholders, advisers and business relationships have been harmed by this.’

Survé had denied all allegations before when testifying before the commission.

Survé’s family trust owns Sekunjalo, which in its turn owns a 61,5% share in African Equity Empowerment Investments (AEEI), with the latter owning a 49,3% share in Ayo.

Ayo currently trades at R12,00 on the JSE.

  • Ed Herbst is a veteran journalist who these days writes in his own capacity.