Software and technology group Ayo Technology Solutions has reached a settlement with government’s investment arm that could it see it reduce its investment in the controversial company.
In a thinly worded statement at the weekend, Ayo — which is indirectly controlled by Independent Media owner Iqbal Survé — said it had entered into a settlement agreement with the Public Investment Corporation (PIC), the terms of which are confidential.
The agreement was made an order of court on Friday.
In a note to shareholders, the company advised that talks had reached an “amicable conclusion”.
It had been reported that African Equity Empowerment Investments (AEEI), also owned by Survé, is expected to unbundle its shares in Ayo as the company headed to court earlier in the month in a bid by the PIC to get its money back.
“The parties look forward to their joint endeavours in creating growth and value in the business of Ayo and for it to realise its true potential as a key player driving transformation within the SA ICT landscape,” said the company.
Its accounting practices came under scrutiny after a controversial investment in Ayo by the PIC, one of several investments probed in the Mpati commission of inquiry into the PIC.
The inquiry’s report, published in 2020, deals with 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.
News of the settlement comes soon after the software and technology group announced in January that it will start retrenchment talks as part of an “ongoing restructuring process” and cost-cutting exercise.
At the time, the company said the section 189A process, which will start with formal consultations with affected employees, adheres to its “seven-point strategic plan to ensure the sustainability of the business” as announced to investors in April 2021.
TimesLIVE reported that Independent Media staff woke to the shocking news on Friday that they would only be paid 75% of their salaries, with “the balance of 25%” being “advised during the course of the coming week”.
According to insiders who spoke to TimesLIVE anonymously, the decision was made after Ayo, the parent company of AEEI and other companies under Sekunjalo Investment Holdings, had to repay the PIC.
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