Software and technology group Ayo Technology Solutions, which is indirectly controlled by Independent Media owner Iqbal Survé, announced on Tuesday it will start retrenchment talks as part of the company’s “ongoing restructuring process” and cost-cutting exercise.
The company said in a statement that the Section 189A process, which will start with formal consultations with affected employees, is in adherence with its “seven-point strategic plan to ensure the sustainability of the business” as announced to investors in April 2021.
A focus of this plan, which was initiated in response to the closure of its banking facilities, was to reduce costs and transform the company into an information technology investment holding company.
“To that end, the board met ... and resolved to target to significantly reduce operational costs in the 2023 and 2024 financial years, through a combination of terminating operational vacancies and the reduction of operational costs,” Ayo said.
The company’s accounting practices came under scrutiny after a controversial investment in Ayo by the Public Investment Corporation (PIC), one of several investments probed in the Mpati commission of inquiry into the PIC.
The inquiry’s report, published in 2020, found irregularities related to its R4.3bn investment in Ayo. The inquiry found that the PIC’s subscription for 99.8-million Ayo shares at R43 each was grossly overvalued.
Based on findings in the report, in December 2022 the JSE censured and fined the company R1.5m for not publicly disclosing money that was moved between related companies.
The company is involved in litigation with several parties, including banks and the PIC. /With Nico Gous and Michelle Gumede
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