Although the Public Investment Corporation (PIC) was the only investor to buy shares in Ayo Technology Solutions when the company listed on the JSE in December 2017, the investment manager appeared to have no influence on the date of the listing. 

According to the testimony of Victor Seanie at a commission of inquiry into the PIC’s affairs, the PIC’s analyst responsible for assessing the value of the Ayo shares, this put the teams under enormous pressure to meet the December 15 deadline. 

But former PIC CEO Dan Matjila said although there was pressure to meet the listing deadline, “I did not put any pressure on anyone to make specific recommendations, including the valuation to ensure that the deal worked”.

Matjila did admit to phoning executives in each of three specialist teams (risk; legal; and environmental, social and governance) on December 13 2017 “to ascertain from them if their reports had been concluded and, if so, whether their reports recommended the conclusion of the transaction”.

Matjila said he was informed that while the reports had not yet been prepared and printed, all of them recommended the deal should be concluded. 

He said he was then happy to sign the subscription form ahead of a formal investment committee meeting that would later ratify the deal. 

The signing of the subscription agreement committing the PIC to purchase shares at the listing of Ayo has yet to run its course at the PIC. Documents leaked to the media in June prepared on behalf of the company’s lawyers revealed that the investment manager was considering a range of disciplinary sanctions against eleven executives for their role in the approval of the Ayo investment. 

Earlier on Wednesday, Matjila refuted allegations that his “close, personal friendship” with Iqbal Survé was the motivation behind the state asset manager’s investments in entities associated with the businessman. 

“Yes there was a continuous engagement with Dr Survé and the reason for this was not because of friendship per se, but because I and my colleagues were worried that the PIC was being increasingly exposed to high risk and I needed to be closely involved with the major players so as to be able to continually assess the situation,” Matjila told the inquiry.

In his testimony before the commission, Survé denied having a close friendship with Matjila, instead referring to the respect he had for him as an investment professional. 

The inquiry, chaired by retired supreme court judge Lex Mpati, is examining events in December 2017. The PIC at the time was considering a range of options regarding its investment in and loans to Independent Media, and was considering making new investments into Ayo Technologies and Sagarmatha.

All three entities are directly or indirectly controlled by Survé.

The PIC became the only investor to buy shares in Ayo when it listed on the JSE on December 17 2017. The state asset manager acquired a 29% stake for R4.3bn, paying R43 per share. On Wednesday morning, Ayo’s share price was at R9, representing a decline of 79%.

The “high risk” referred to by Matjila presumably relates to the outstanding R1.3bn that Independent owed the PIC. Despite getting Survé to sign personal surety of R500m when the PIC lent the money to Independent in 2013, the PIC has chosen not to exercise any of its rights regarding recovering the outstanding money.

The only option the PIC was willing to entertain was a proposal from Sekunjalo, Survé’s holding company, to extinguish Independent’s debt in exchange for shares in Sagarmatha, a company that was yet to issue a pre-listing statement (PLS). 

A PLS informs investors of the number of shares the company intends to sell at the listing and the proposed offer price per share. It also includes detailed information on the business model of the company, including financial information on which investors can rely to inform their valuation of the shares. 

Matjila said he had never met Survé on his own to discuss Sagarmatha, but did admit to overseeing the correspondence between the two organisations and sharing research with Survé.

“There has been a lot of interaction with various proposals that I passed on to the team. It was not bilateral. In the case of Sagarmatha, I never met him alone,” he said.