Mustek, AYO flag irregular expenditure at Sizwe IT
Sizwe Africa IT Group has suspended employees after flagging irregular expenditure at the Centurion-based ICT services provider.
This, after its shareholders JSE-listed AYO and Mustek yesterday issued statements about irregular expenditure at Sizwe.
Technology group AYO owns a 55% stake in Sizwe, while PC distributor Mustek is a minority shareholder in the firm. AYO bought into Sizwe in 2018, in a deal valued at approximately R165 million.
AYO is a broad-based black economic empowerment ICT group offering end-to-end solutions to various industries.
It was previously called Sekunjalo Technology Solutions. AYO listed in the computer services sector of the JSE in December 2017.
Following the statements, Sizwe confirmed to ITWeb via e-mail that the employees in question had been suspended, while investigations take place.
According to Sizwe, during an internal audit, it came to light that there have been allegations of irregular expenditure by certain employees of Sizwe Africa IT Group during the past financial year.
“These employees allegedly did not follow due process in line with our internal policies and procedures, and acted outside of their authority mandate,” says the firm.
“Sizwe Africa IT Group takes these allegations very seriously and is committed to addressing them speedily and transparently. We have always placed a strong emphasis on adhering to the highest standards of corporate governance and ethics, and any deviation from these principles is a matter of deep concern to us.
“We are currently conducting an internal investigation to ascertain the full extent of the irregularities. The board has taken the decision to deploy a team of external experts to ensure an unbiased and thorough review of the matter.
“Sizwe Africa IT Group remains fully committed to ensuring the integrity of our operations and maintaining the trust and confidence of our stakeholders, and will keep all stakeholders informed on the progress and outcomes of the investigations.
“The individuals implicated in this matter have been suspended pending the outcome of the disciplinary process.”
Sizwe Africa IT Group forms part of AYO’s managed services segment.
AYO says it believes in upholding the highest standards of transparency, accountability and adherence to regulatory compliance, and “it is with regret that we must inform stakeholders of the identified irregularities”.
It adds that AYO’s nominee directors are appointed in a non-executive capacity to the Sizwe board of directors and, accordingly, are not directly involved in the day-to-day operations and business activities of Sizwe.
“An internal audit revealed that certain expenditure incurred during the 2023 financial year, by certain employees of Sizwe, did not follow due processes and procedures prescribed by the company and was beyond the ambit of the formal authority delegated to such employees.”
It notes that such irregular expenditure will be accounted for in AYO’s results to be released for the 2023 financial year.
“The effect of the aforegoing on both earnings per share and headline earnings per share is between 6.05 cents and 7.39 cents, based on a weighted average number of shares in issue of 343.8 million. The aforegoing does not necessitate AYO issuing a trading statement.”
According to the firm, no AYO directors, employees or representatives have been implicated in the matter.
“The directors wish to advise all stakeholders that we remain focused on our core business operations and the value we bring to our customers, employees and stakeholders. While this incident is regrettable, we will ensure this matter is dealt with appropriately.”
In a separate statement, Mustek says it also believes in upholding the highest standards of transparency, accountability and adherence to regulatory compliance and “it is with regret that we inform stakeholders of the identified irregularities”.
“As Mustek, we remain focused on our core business operations and the value we bring to our customers, employees and stakeholders. While this incident is regrettable, we will ensure this matter is dealt with appropriately.”
Such irregular expenditure will be accounted for in Mustek’s results to be released for the financial year ended 30 June, says the PC distributor.