Sekunjalo Investment Holdings chair Iqbal Survé and his delegation’s attempts to heap blame on dark forces undermining businesses linked to him were on Wednesday tossed aside by MPs as “conspiracy theories”.
Survé and his team addressed parliament’s finance committee on Ayo Technology Solutions and Independent Media's activities, with Ayo chair Wallace Mgoqi highlighting that there were destructive forces trying to undermine the businesses in presentations lasting about two hours.
“There was extensive collaboration between journalists/public commentators and private corporate entities designed to do maximum damage,” Mgoqi said. “We fear that 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,” he added, saying Ayo had suffered irreparable harm and reputational damage by actions of the PIC and the media.
Mgoqi condemned the “smear campaign” he said was launched in March 2018 against Ayo. Asset managers and hedge funds, he said, had taken advantage of the negative publicity to undermine its value.
He said Ayo’s acquisition targets were adopting a “wait and see approach”, customers were reducing orders and banks were terminating facilities and closing accounts based purely on media reputation.
Another member of the delegation, Independent Media COO Takudzwa Hove, said the collapse of the PIC/Sagarmatha/Independent Media deal, which would have seen the listing of Sagarmatha, was “indicative of a hidden hand that stopped the listing and the unlocking of value for the PIC.”
But the MPs said they were not impressed by the claims, saying they were under the impression that Ayo and Sekunjalo subsidiary Independent Media were in the house to give their response to the findings of the Mpati commission of inquiry into the Public Investment Corporation (PIC), which has invested billions of rand in both of them.
The Mpati commission, tasked with investigating the goings on at the PIC, found that former PIC CEO Dan Matjila had lied under oath regarding the PIC’s R4.3bn investment in Ayo. It found that Matjila had played a personal role in ensuring that the investment was approved by the PIC’s deal team.
It also found that the deal was rushed and that there was material evidence of “non-disclosure” regarding the approval of the deal. In 2017 the PIC subscribed to 99.8-million shares in Ayo at a price of R4.3bn or R43 a share giving Ayo a value of about R15bn.
The share price is now about R7 giving the company a market capitalisation of R2.4bn. The commission found that the R4.3bn was grossly overvalued as there was no proper valuation to back the investment and therefore “the question remains as to whether the PIC subscribed for the shares at a fair and reasonable value”.
In addition it also found that the close relationship between Matjila and Survé “created top-down pressures that the deal teams experienced to get the requisite approvals”. With regard to Independent Media, the PIC claims that its loan to Sekunjalo Independent Media was never serviced but Survé insists that no loans were made and that the PIC had invested in the consortium.
PIC CEO Abel Sithole, who also addressed the committee, said he was constrained about giving too many details of its position as the asset manager was still engaged in legal disputes with Ayo and Independent Media in the courts.
The PIC is seeking to recoup the billions it invested in Ayo and is seeking to liquidate Sekunjalo Independent Media.
DA finance spokesperson Geordin Hill-Lewis, with the agreement of ANC MPs Noxolo Abraham and Kenny Morolong and Freedom Front Plus MP Wouter Wessels, disapproved of the “conspiracy theories” presented by Ayo and Independent Media.
Hill-Lewis said the presentations by the companies were “fantasy”. The conspiracy theory of the forces against companies in the Sekunjalo group was just “nonsense” with no evidence to support it.
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