Picture: ISTOCK
Picture: ISTOCK

The Public Investment Corporation (PIC) has rebuffed claims that it invested in JSE-listed Ayo Technology Solutions without due diligence.

City Press reported on Sunday that the PIC had invested R4.3bn in Ayo, which listed on the JSE in December, without adhering to proper procedures.

Citing documents allegedly produced by PIC staff, the newspaper said there were concerns Sekunjalo might use the proceeds of the Ayo capital raise to repay a loan from the PIC worth over R1bn, which it received from the state-owned asset manager to buy Independent News and Media SA in 2013.

The PIC hit back against the report, arguing that "no due diligence requirements were waived" when it made the investment in Ayo.

"The PIC followed the due diligence process applicable to listed investments," said Deon Botha, head of corporate affairs at the state investment manager. Due diligence reports were concluded in November 2017, according to Botha.

He said Ayo would use the cash it raised solely for acquisitions. "The allegations that part of the money will be used to repay the loan that the PIC advanced to Sekunjalo when it acquired Independent News and Media SA are false."

The investment in Ayo was part of the PIC’s mandate to support black-owned companies that wanted to list, Botha said.

Ayo CEO Kevin Hardy said his company had no plans to divert capital to partial owner the Sekunjalo Group.

"I can emphatically confirm that the capital raised by Ayo will be used solely for the purposes of organic growth… and more so to pursue its acquisition agenda in the IT sector," Hardy said.

Ayo would announce acquisitions in the IT sector in the near future, he said.

Since Independent Media had no commercial links to Ayo, there was "absolutely no truth" in the claim that funding would be moved between companies.

City Press reported that prior to making the Ayo investment, PIC staff were concerned that they had not been furnished with financial information for BT Communication Services SA, which is one of Ayo’s most important assets.

Hardy denied the claim, saying Ayo "followed all processes and provided extensive information to the PIC as well as all other investors".

Sekunjalo chairman Iqbal Survé said in a letter to City Press editor Mondli Makhanya on Monday that Ayo’s capital raise was unrelated to Independent Media’s loan from the PIC.

Survé said in the letter that attempts to link Ayo’s listing with himself and Sekunjalo are "false and misleading".

He said Independent Media and African Empowerment Equity Investments (AEEI) – the Sekunjalo group company that holds Ayo and listed the technology unit – "are two completely separate companies".

"Other than being a shareholder, neither I nor Sekunjalo Investment Holdings are involved with Ayo Technologies or AEEI," Survé said.