PIC and AYO settle in court, ending long-running battle
THE battle between the Public Investment Corporation (PIC) and AYO Technology Solutions Limited (AYO) has come to an end, after the companies announced on Friday that they reached a settlement.
This follows the PIC heading to court, looking to dissolve and recoup its R4.3 billion investment in AYO.
The PIC is the custodian of more than 80% of the Government Employees Pension Fund’s (GEPF’s) portfolio.
The GEPF describes itself as Africa’s largest pension fund, with more than 1.2 million active members, more than 450 000 pensioners and beneficiaries, and assets worth more than R1.61 trillion.
On Friday, in a joint statement, AYO and the PIC said they settled the proceedings instituted by the PIC against AYO in the Western Cape Division of the High Court.
The statement said: “The settlement was made an order of court by the High Court, 24 March 2023. The parties have sought to resolve the long-running litigation in a manner that best protects the interests of their stakeholders, in the circumstances, and with a view to giving the business of AYO a chance to create growth and value into the future.”
During the court case, several witnesses were heard, including Lebogang Molebatsi, a former senior employee of the PIC, who advised the GEPF that “AYO was an attractive, catalytic investment”.
Molebatsi said he had enough comfort in the transaction independently of then-PIC CEOs Dan Matjila’s views on the investment.
Another witness, Harvey Wainer, a financial expert with a focus on valuations, appeared as an expert witness for the PIC.
Wainer criticised AYO's numbers presented in its pre-listing statement as “unrealistic and fanciful’”, while André Pieterse, an expert on AYO’s side, deemed the same data to be “realistic, credible and probable”.
The court case continued until Thursday, when the lawyers had a closed session, and on Friday, announced the settlement agreement.
The battle started in May 2019, when the PIC and the GEPF issued a summons to AYO seeking a declaration that the subscription agreement entered into by the PIC with AYO was unlawful and that it be set aside.
The pending court case and a Mpati Commission inquiry, which was to investigate allegations of impropriety at the PIC, led to bad publicity for AYO and related companies.
This ensuing and consistent negative publicity subsequently led to South African banks closing all bank accounts belonging to Sekunjalo Investment Holdings (SIH) and SIH-related companies, including AYO, citing “reputational risk” – although, it must be said, with scant evidence to support these claims.
Last year, SIH and its various related companies embarked on a series of lawsuits to not only ensure they could still trade, but to also clear their name and reputations. These included a formal review of the Mpati Commission report from which much of AYO’s subsequent woes have apparently emanated.
To date, the Competition Tribunal and the Equality Court have agreed with SIH – and de facto AYO – that the banks had discriminated against them. Nedbank is, however, appealing the decision that forced them to reopen and keep open AYO’s and other companies’ bank accounts.
Statements by the PIC and AYO post the settlement agreement point to a mending of bridges and a brighter possible future for AYO.
BUSINESS REPORT