The Public Investment Corporation (PIC) is considering liquidating Iqbal Survé’s Sekunjalo Investment Holdings, as well as court action to freeze the assets of its subsidiary Ayo Technology Solutions.
Parliament’s finance committee heard on Tuesday that the PIC has issued a letter of demand to Sekunjalo over its failure to repay the loan it gave the company to acquire Independent Media.
The PIC’s head of legal services Lindiwe Dlamini said in reply to questions by MPs on Tuesday that the state-owned asset manager is looking at potentially liquidating the company. Dlamini also told the committee that a recent media report by Noseweek magazine alleged that Ayo was taking funds off shore. The PIC said it will consider applying for an anti-dissipation order against Ayo, which would effectively freeze its assets.
The PIC’s interest in the matter is to secure its claim of R4.3bn against Ayo.
Dlamini said the PIC has contacted the Financial Intelligence Centre and the SA Reserve Bank about the alleged transfer of funds abroad by Ayo and is taking the issue “very seriously”.
Survé said in a statement that suggestions by PIC that “there is any basis on which the PIC can liquidate Sekunjalo, [are] deceitful, reckless and aims to destroy and destabilise our business”.
“Ms Dlamini is well aware of the fact that the special purpose vehicle, Sekunjalo Independent Media (SIM), that was created for the purpose of securing Independent Media, is an entirely different juristic entity. Ms Dlamini has deliberately and willingly misinformed parliament and we demand she immediately retracts her statement and conveys the truth. In fact, the Sekunjalo Group is a creditor, like the PIC, when it comes to SIM.”
He said that if Dlamini did not “publicly correct her falsehood” within 24 hours Sekunjalo would proceed with “appropriate action”.
Ayo chair Wallace Mgoqi echoed Survé, saying that Dlamini’s comments about the company were “reckless, entirely without merit and wholly inappropriate”.
“Ayo, as any company operating in SA today, would need to apply to the SA Reserve Bank to obtain the proper regulatory approval to engage in a transaction of this nature. Ayo has not made any application for Reserve Bank approval nor does it intend to do so.
“This is yet another attempt to portray Ayo in a negative light and to force parliament’s hand. The PIC has no evidence on which it can have based its thinking and, as such, has blatantly lied to parliament.”
The events in parliament follow a raid by the Financial Sector Conduct Authority (FSCA) on Sekunjalo Investment Holdings last Wednesday. In July, Survé told journalists that it was he who had asked the regulator to investigate trading in the shares of Ayo and its top shareholder, African Equity Empowerment Investments.
The FSCA, which first announced the investigation in March, said the high court in Cape Town had granted the search-and-seizure order, allowing them to conduct the raid under the supervision of an independent attorney.
The PIC, which manages R2-trillion worth of investments largely on behalf of government employees, paid R4.3bn for a 29% stake in Ayo, equivalent to R43 a share, in 2017. On Tuesday afternoon, Ayo was trading at R5.60, having fallen steadily in low-volume trade from a high of R24 in January. The company is now valued at R1.9bn.
The investment by the PIC has been put in the spotlight by the Mpati commission of inquiry into the asset manager under the leadership of former CEO Dan Matjila, who retired from the PIC in late 2018.
The PIC has launched legal action to reclaim the money on the grounds that the investment was made on the basis of alleged misrepresentations by the company and alleged internal flouting of policies and processes by PIC employees. Ayo is opposing the application, one of the grounds of which is to question the authority of Matjila to approve the investment.
With staff writer
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