African Equity Empowerment Investments (AEEI), the parent company of Ayo Technology, said on Thursday that it has identified accounting errors in the subsidiary’s prior financial results.

AEEI said the errors were in Ayo’s unaudited interim results to end-February 2018, as well as the same period in 2019, saying in a trading update that it will go into detail when it releases results on June 15.

The bookkeeping errors come as Ayo faces a lawsuit from the Public Investment Corporation, the investor of R2-trillion of public servants’ pensions, to reclaim R4.3bn it invested in Ayo on the grounds that it misrepresented its assets. 

Ayo’s auditors BDO, which did not audit the two earnings reports in which the errors were found, resigned in 2019. 

Companies such as Steinhoff and Tongaat Hulett are cleaning up their balance sheets following the revelation of dodgy accounting practices, shining an unwelcome spotlight on the auditing profession.

AEEI also said headline earnings per share, the primary profit measure that strips out certain one-off items, for the six months to end-February 2020 are expected to be between 20% and 40% lower.

Shares in the company closed on Thursday unchanged at 79c, having fallen 60.5% over the past 12 months.

Update: June 12 2020 
This article has been updated to reflect the fact that the results had not been audited when the errors were picked up, and that BDO has since resigned as auditor of AEEI.