Iqbal Survé-linked Ayo Technology Solutions says the Public Investment Corp (PIC) should have checked the small print before it rushed to commit R4.3bn for a 29% stake in the dying days of 2017 — when everyone, including small-print readers, is on holiday.

It seems Ayo didn’t give the PIC an undertaking that its money was going into a business that would be pumping out revenue of R4.4bn and gross profit of R1.4bn a year later. These figures were little more than wishful thinking, or as Ayo explains, forward-looking statements, which apparently shouldn’t be taken too seriously.

If, says Ayo in recently lodged court papers, the PIC had read the prelisting statement (PLS) issued on December 13 2017, two days before the placement was due to close, it would have been aware that the promises of great wealth were based entirely on "forward-looking statements".

The clues missed by the PIC were littered throughout the PLS, which Ayo says represented the "sole final and binding offer" underpinning the R4.3bn investment. Any representations made before the final PLS were nothing more than introductory negotiations.

Indeed, if the then PIC CEO Dan Matjila hadn’t been in such a rush to do the deal — completed within a matter of weeks — he might have noticed under "Important legal notes" a warning about these "forward-looking statements".

"By their nature, [they] involve risks and uncertainties because they relate to events, and depend on circumstances, that may or may not occur."

So, says Ayo, there was no guarantee of future performance.

This means there was no failure to disclose material facts and no misrepresentation. Essentially things just didn’t work out quite as Ayo had hoped. Stuff happens. And, says Ayo, it would not be fair to force it to pay back the R4.3bn just because the yield on the PIC’s investment is less than it expected. Its R4.3bn investment is worth less than R1bn and falling.

A litany of chilling and self-serving arguments make up the bulk of Ayo’s response to the legal action launched by the PIC at the end of June, which argues that the decision to subscribe for the shares was unlawful and must be set aside. The PIC wants its money back and is happy to return the 99.7-million shares to Ayo.

A central part of the listing plan was Ayo’s proposed purchase from African Equity Empowerment Investments (AEEI), another entity controlled by Survé’s Sekunjalo, of its 30% effective stake in BT-SA for R900m. With this purchase would come two BT customers and the promise of more to follow. They would be drawn by the opportunity to bump up their broad-based BEE ranking by washing a chunk of their IT procurement through Ayo.

"The board anticipates revenue to increase by 825% from the current year (2017) figures. This is predominantly from existing customers engaged with BT, who are anticipated to move to Ayo Technology, and an anticipated increase in market share," says the PLS.

For reasons that are not entirely clear, none of this happened.

Ayo now denies that it misrepresented "that it was a foregone conclusion that the 30% effective shareholding" in BT-SA would be transferred to it.

BT-SA refuses to shed any light, and will not even say if there was ever an intention to approve the sale of the 30% to Ayo.

But Ayo’s court papers add an interesting twist. "The BT transaction did not materialise on account of the conduct of the PIC, which advised BT-SA and the defendant [Ayo] that it did not support the BT transaction."

The PIC did not respond to the FM’s request for an explanation as to why it would sabotage its R4.3bn investment in this manner. If it did not support the BT transaction, why did it invest in Ayo, whose prospects depended on that transaction?

As Ayo tells it, the PIC itself was to blame for believing Ayo shares were worth R43 apiece because it did not pay close attention to the warnings; so was Grant Thornton, which provided a limited assurance report on the forecast information, though quite remarkably the report said "no assurance is expressed regarding the achievability of the forecast".

Ayo rather oddly suggests that further proof that it wasn’t to blame was that the representations it made to the PIC were with the approval of the JSE in terms of its listing requirements. In addition, all of this had the backing of professional adviser PSG Capital, which picked up a handy R14.5m in fees, and little-known AEEI Corporate Finance, which secured a hefty R57.7m from the Ayo listing.

Rather bizarrely, Matjila, who has blamed his team for not doing a proper due diligence, told the Mpati commission of inquiry that the PIC has not lost money on Ayo. The money is still in the company and earning interest, says Matjila, though the long-promised audited figures that would support this unlikely assertion have so far failed to materialise. At its current share price of R7, the PIC’s investment is worth less than R1bn.