PIC given more time to recoup R4.3bn Ayo investment

The PIC paid R43 per share for a 29% stake in Ayo in a transaction approved by former CEO Dan Matjila and not the board. (David Harrison/M&G)

The PIC paid R43 per share for a 29% stake in Ayo in a transaction approved by former CEO Dan Matjila and not the board. (David Harrison/M&G)

The Public Investment Corporation’s (PIC) deadline to comply with the Companies and Intellectual Property Commission’s (CIPC) compliance notice instructing them to recoup the irregular R4.3-billion made to Ayo Investment Technology has been extended.

READ MORE: PIC going after R4.3-billion paid to Ayo

Evidence leader advocate Jannie Lubbe told the Mpati commission, headed by Justice Lex Mpati, that the CIPC has agreed on an extension of the time limit of that notice from 15 days to 60 days.

The notice was effective from the date it was issued on February 21.

“I am further informed by the PIC that they have been briefed by their lawyers to institute proceedings against Ayo for an anti-dissipation order against the funds and to reclaim the total amount of the funds,” Lubbe said.

At the same time, Ayo has launched its own application before the Pretoria high court calling for the notice to be set aside and requesting that the court interdict the PIC from complying with the notice.

Ayo’s matter will be heard on Wednesday. 

The information and communications technology company will argue the notice issued by the CIPC was procedurally unfair because the company was not granted an opportunity to make its case before the company regulator prior to the compliance notice being issued.

Ayo states in court papers that should the notice be enforced and Ayo is made to return the PIC’s R4.3-billion in 15 days of more, “untold harm” will befall Ayo’s operations. The company maintains that the funds were acquired through a valid transaction process.

Testimony before the commission and an internal audit investigation by the PIC has revealed that the funds were irregularly awarded to Ayo when the former chief executive Dan Matjila signed an irrevocable subscription agreement to buy Ayo’s shares.

READ MORE: PIC liquidated stocks to finance R4.3bn Ayo investment

Matjila signed the agreement without the necessary due diligence being completed and before the deal was presented at the requisite approval committee. The deal was also flagged as being overvalued by the PIC’s investment team.

Tebogo Tshwane

Tebogo Tshwane

Tebogo Tshwane is an Adamela Trust financial journalism trainee at the Mail & Guardian. She was previously a general news intern at Eyewitness News and a current affairs show presenter at the Voice of Wits FM. Tshwane is passionate about socioeconomic issues and understanding how macroeconomic activities affect ordinary people. She holds a journalism honours degree from Wits University.  Read more from Tebogo Tshwane

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