Dan Matjila: Did not have the authority to do the deal. Picture: Sunday Times/James Oatway
Dan Matjila: Did not have the authority to do the deal. Picture: Sunday Times/James Oatway

The Public Investment Corp’s (PIC) formal account of the events surrounding its R4.3bn investment in Ayo Technologies, available in recent court papers, is an even more damning version than was presented by PIC employees to the Mpati commission.

There was no due diligence, former CEO Dan Matjila did not have the authority to do the deal and Iqbal Survé’s Ayo misrepresented most of the facts, including that there were other investors prepared to pay R43 a share for it.

This means the next step in the saga will extend from the corridors of the Sammy Marks building in Pretoria where the Mpati commission has been investigating allegations against the PIC, to the Western Cape High Court.

This is where the PIC is set to do legal battle with Ayo in a bid to get back the R4.3bn that Matjila invested into the Sekunjalo subsidiary in December 2017.

Independent analyst Anthony Clark, one of the few who looks at Ayo, says the share price has plummeted to R9 and trading is illiquid.

"Why would you want to get involved in a share at the centre of so much scrutiny and allegations of misleading investors?" asks Clark.

The PIC documents say its decision to subscribe for R4.3bn of Ayo shares was unlawful and must be set aside. It wants its money back, in exchange for 99.7-million shares.

"It was a reckless use of resources and contrary to efficient economic and effective use of resources," the PIC says.

And in the court papers, details of Ayo’s proposed purchase of 30% of British Telecoms SA (BTSA) also emerge. The PIC tells how it was approached in November 2017 to participate in Ayo’s listing, scheduled for December 15.

Central to the proposal was the planned R900m purchase of the stake in BTSA from AEEI, another entity controlled by Survé’s Sekunjalo. The rush to push the deal through was, the PIC was told, because of the requirements of a potential customer, Sasol.

Presumably motivated by the extra BEE points, Sasol was going to redirect its BT-based communication contract through Ayo.


However, BT had not agreed to the Ayo plan, and neither Matjila nor head of listed investments Lebogang Molebatsi had the authority to sign off on the deal.

"No due diligence on the Ayo transaction had been completed when the subscription applications were signed," says the PIC, pointing out that the information presented to it had been "incomplete and incorrect".

Not only had the touted acquisition of the BTSA stake not been approved by BT, but Ayo had never expected other investors to subscribe for shares.

"Certain investors had been approached by Ayo and requested to put in subscriptions for shares in terms of the private placement on the assurance that such offers for subscription would not be accepted by Ayo," says the PIC.

Sasol says it has taken note of statements made at the Mpati commission, and that it has a "sound commercial agreement" with Ayo.

Spokesperson Matebello Motloung says: "We undertook a thorough due diligence process of Ayo to ensure it not only met our technical requirements, but also our business and transformation objectives, which are top priorities for Sasol."

The latest court action is not unconnected to a move back in March when the North Gauteng High Court set aside a compliance notice issued by the Companies & Intellectual Property Commission (CIPC) requiring the PIC to recover the R4.3bn. The CIPC issued the notice to the PIC because it believed the manner in which it had distributed the money to Ayo represented a contravention of the board’s fiduciary duties.

Iqbal Survé: His Ayo company misrepresented most of the facts. Picture: Hetty Zantman
Iqbal Survé: His Ayo company misrepresented most of the facts. Picture: Hetty Zantman

The CIPC is responsible for overseeing implementation of the Companies Act and in this role was largely responsible for blocking the listing of Sekunjalo’s unicorn Sagarmatha in April 2018. It saved the PIC from squandering another approximately R2bn on a sham listing by pointing out to the JSE that Sagarmatha had not filed annual financial statements.

The compliance notice issued to the PIC in February was set aside because the court ruled the 15 days’ notice given by the CIPC was impractical. At the time the PIC itself, with Matjila removed from office, said it did want the money back but that the timeline was unrealistic.

The Mpati commission has heard how Ayo misrepresented facts about its finances. Ayo’s former CIO, Siphiwe Nodwele, testified that it exaggerated its value at the time it was seeking the PIC’s investment and had given the market misleading information on its revenue prospects.

Its former CEO, Kevin Hardy, testified about allegations of accounting manipulation. In response, the JSE asked Ayo’s auditor, BDO, to review the numbers provided to the market.

And Ayo’s former CFO, Naahied Gamieldien, testified in April that she was asked to "adjust" margins to increase the company’s profit.

However, BT had not agreed to the Ayo plan, and neither Matjila nor head of listed investments Lebogang Molebatsi had the authority to sign off on the deal.

"No due diligence on the Ayo transaction had been completed when the subscription applications were signed," says the PIC, pointing out that the information presented to it had been "incomplete and incorrect".

Not only had the touted acquisition of the BTSA stake not been approved by BT, but Ayo had never expected other investors to subscribe for shares.

"Certain investors had been approached by Ayo and requested to put in subscriptions for shares in terms of the private placement on the assurance that such offers for subscription would not be accepted by Ayo," says the PIC.

Sasol says it has taken note of statements made at the Mpati commission, and that it has a "sound commercial agreement" with Ayo.

Spokesperson Matebello Motloung says: "We undertook a thorough due diligence process of Ayo to ensure it not only met our technical requirements, but also our business and transformation objectives, which are top priorities for Sasol."