The Public Investment Corporation (PIC) says it will forge ahead with plans to recoup the R4.3bn it invested in Ayo Technology Solutions, despite Ayo being granted a reprieve by the North Gauteng High Court on Tuesday.

The court found that a regulatory demand that the PIC recoup its investment, made under the watch of former CEO Dan Matjila, was unlawful.

The PIC bought a 29% stake in Ayo at R43 a share in December 2017, implying a valuation of R14.8bn, despite Ayo having a book value of R67m that year.

In February the Companies and Intellectual Property Commission (CIPC) served the PIC with a compliance notice instructing its directors to recover the investment on the grounds that they had contravened the Companies Act by knowingly causing it harm.

Then in early March, Ayo said it had launched two court applications aimed at holding on to the investment.

The PIC also brought an application before the North Gauteng High Court to have the notice set aside on the grounds that it was impossible to comply with in the given timeframe. 

Ayo said on Tuesday a judge had ruled in favour of the PIC and declared the CIPC’s notice unlawful. This meant the notice had “no force and effect”.

“Due to the ruling in favour of the PIC, the successful action brought by Ayo is moot and was therefore removed from the roll,” Ayo said.

The PIC said it "welcomes the decision" of the court, which was partly based on the CIPC's notice containing factual errors.

On “the only issue in dispute”, the court found that the CIPC failed to afford the PIC its right to be heard prior to the notice being issued, the PIC said. This alone rendered the notice invalid.

“The PIC remains committed to carry out to conclusion the steps that it had already taken to recover the invested funds without any delay,” the asset manager said.

Owing to one small block of shares trading hands, Ayo’s stock price was 6.3% down at R15 on Tuesday afternoon. The company’s shares have lost 65% of their value since listing.