PIC backtracks on AYO allegations

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CAPE TOWN – The Public Investment Corporation (PIC), reacting to a letter received from AYO Technology Solutions, has backtracked on the allegations made – by its acting executive head of legal, governance and compliance, Lindiwe Dlamini – in Parliament that Sekunjalo Investment Holdings, through AYO, was siphoning PIC-invested funds offshore.

During a question-and-answer session of the Standing Committee on Finance’s proceedings, one of the committee members raised a question directed at the PIC’s investment in Sekunjalo.

The question was raised with concern around allegations that Sekunjalo was in the process of moving its assets or funds offshore. In a statement yesterday, the PIC said that it was aware of the allegations and indicated that it was considering the allegations very seriously.

The asset manager said it was engaging with relevant stakeholders to determine necessary action to be taken in order to safeguard its rights and assets invested in Sekunjalo through AYO.

AYO chief executive Howard Plaatjes yesterday rejected these claims as baseless, categorically stating that the company’s funds are intact and invested within South Africa.

AYO has disclosed to the PIC where the funds have been invested.

“We respect and co-operate with local authorities the same way the PIC says in their statement today. We are open to engagement and the PIC as shareholders are free to raise their concerns directly with us instead of on public forums, which negatively impacts shareholder value,” said Plaatjes.

AYO chairperson Dr. Wallace Mgoqi said AYO, as any company operating in South Africa today, would need to apply to the South African Reserve Bank (Sarb) to obtain the proper regulatory approval to engage in a transaction of this nature.

Plaatjes shared the sentiment, reiterating that AYO had neither made any application for Sarb approval nor did the tech firm intend to do so. The PIC said in a statement that its position to safeguard its rights and assets invested in Sekunjalo AYO was consistent with its legal obligation and responsibility to ensure that appropriate action and interventions were undertaken to protect the value of assets under its management for the benefit of its clients.

“The PIC will continue to do so through due and proper legal processes, including co-operating fully with any law enforcement agencies or regulatory bodies.

“Regarding the AYO matter, it is important to note that summons were issued by PIC against AYO on May 29 in the Cape Town High Court and that matter will be heard in due course,” the asset manager said.

After several media reports on how the PIC intends to liquidate Sekunjalo Investment Holdings, company chairperson Dr. Iqbal Survé said: “We need to reiterate and reinforce our statement of yesterday (Wednesday) that the PIC has never loaned any monies to Sekunjalo Investment Holdings and the Sekunjalo Group.”

“Sekunjalo has not signed surety nor issued any put options to the PIC,” said Survé. “It is, therefore, bewildering to us that the PIC could consider liquidating Sekunjalo Investment Holdings for a debt it is not tied to.

“The letter Dlamini referred to in her submission to Parliament was sent to Sekunjalo Investment Media (SIM), a ringfenced independent legal entity within the Sekunjalo Group.

“This was dealt with at the time and any further actions pertaining to this letter will be dealt with by the normal court process. No correspondence of any such nature has been received by Sekunjalo Investment Holdings or the Sekunjalo Group.”

Sekunjalo, through its lawyers, wrote to the PIC and gave the asset manager until the close of business yesterday to clarify their statement. “Failure to do so will see Sekunjalo exercise its right to not only institute a damages claim against the PIC but also against Dlamini in her personal capacity.”

The PIC said it reserved its rights and would elect not to make further public statements at this time until any anticipated and real legal proceedings – of whatever form or manner they may take – were instituted before the court.

This story first appeared in the Business Report Online