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AYO seeks parliamentary probe, claims politics behind its woes

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JSE-listed AYO Technology Solutions is calling for a parliamentary inquiry into four entities that it has clashed with in recent months, accusing them of victimising and unfairly censuring the tech investment firm.

The four − the Johannesburg Stock Exchange (JSE), Companies and Intellectual Properties Commission, Public Investment Corporation (PIC) and Financial Sector Conduct Authority (FSCA) − have all had legal clashes with AYO.

Yesterday, AYO requested Parliament’s Standing Committee on Finance to look into the conduct of these four entities.

Company executives appeared before the committee yesterday to respond to the findings of the Mpati Commission of Inquiry, which was appointed by president Cyril Ramaphosa in October 2018, to look into allegations of impropriety at the PIC.

The PIC invested in a 29% stake in AYO when it listed on the JSE in December 2017.

The commission, led by judge Lexi Mpati, probed PIC’s R4.3 billion investment in AYO, to establish whether it was above board and that the PIC followed all investment policies.

AYO chairperson Dr Wallace Mgoqi defended the transaction on Wednesday, telling the committee that without “any rational basis and precedent” the four organisations went on the offensive against the company.

According to Mgoqi, despite cooperating with the commission of inquiry into alleged impropriety at the PIC, AYO was shocked by the intense scrutiny to which it had been subjected.

“AYO is confident, notwithstanding the negative publicity, that it will be successful in any litigation by the PIC or any other party.

“AYO’s position remains that it has done nothing wrong and is a victim of a smear campaign by hidden hands,” he said.

The confrontation

The spat between AYO and the four entities has been brewing for some time and the tech investment firm claims it’s a victim of concerted efforts to discredit it.

Last year in August, the JSE publicly censured and fined AYO for making false and misleading financial reports, which were disseminated to the bourse, shareholders and investors.

The JSE said at the time the company failed to exercise the highest standards of care when disseminating financial information to the market.

With the PIC, the dispute emanates from the findings of the Mpati Commission, which found that former PIC CEO Dan Matjila was allegedly dishonest about his involvement in the transaction and played a personal role in ensuring the transaction was approved by the fund manager’s deal team.

In Parliament yesterday, Mgoqi said there was no evidence of corruption pertaining to AYO contained in the report.

“The investment was presented to the PIC by the AYO corporate investment team, including the newly recruited chief executive from a multinational, and executives with a combined value of 75 years’ (experience) in the ICT sector, presented to peers.

“Experienced PIC analysts with 50 years’ experience together saw the business case for the ICT investment and transformation. Hearsay and unsubstantiated claims were made by people at the commission.”

Regarding the FSCA, in October, the organisation started probing a case of irregular share trading against AYO Technology Solutions. The company responded, saying it was part of an orchestrated campaign against the Sekunjalo group of companies for political reasons.

Ruined hopes

The AYO board chairperson yesterday also blamed negative media reports for scuppering a deal it had tentatively sealed with British Telecom SA (BTSA).

In 2018, AYO Technology intended buying a 30% stake in BTSA from its parent company, for a subscription price of R990 million, but the deal collapsed.

“Without PIC support, the BT company decided to withdraw from engagement with AYO. We fear there is a hidden hand that used the commission to smear AYO and that continues to direct activities to undermine the business and reputation of AYO,” said Mgoqi.

In response, parliamentarians demanded more answers from the AYO executives, with EFF’s Floyd Shivambu pressing for a detailed response on the PIC deal.

He said: “With regard to AYO, what were the conditions of the loans and equity that was provided and are those loans being serviced?”

AYO insisted the transaction was above board.

“We need to avoid conspiracy theories unrelated to the Mpati Commission,” the ANC’s Noxolo Abraham said.

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