Case between CIPC and PIC postponed
THE Public Investment Corporation (PIC) was granted a postponement at the North Gauteng High Court yesterday in a case against the Companies and Intellectual Property Commission (CIPC).
This after the matter was removed from the roll.
The PIC had turned to the court after being issued with a compliance notice by the CIPC demanding that it recoup its R4.3 billion investment in Ayo Technology Solutions within 15 days.
The deadline for the CIPC’s unprecedented compliance notice to the directors at the PIC demanding they recoup the money, with interest for six months on the amount, was tomorrow.
The asset manager’s directors had also been threatened with criminal prosecution if they failed to comply with the notice.
The PIC asked the court to intervene on an urgent basis and declare the notice unlawful.
Advocate Gilbert Marcus, SC, for the PIC, asked the court to postpone the case to next Thursday, arguing that his client would not be in a position to comply with the notice.
The CIPC’s legal team, led by advocate Frans Arnoldi, SC, did not object to Marcus’s request for a postponement.
The entity’s legal representatives had to field tough questions from Judge JW Louw, who is presiding over the case.
The judge demanded to know why the asset manager filed court papers two weeks after the compliance notice issued by the CIPC on February 21.
He said this was a very short period for the CIPC to respond.
In response, Marcus said he had
complied with the court application.
He said he had received an undertaking from the CIPC’s lawyers that the notice would not be enforced pending the court’s ruling. In addition, both parties had agreed to suspend the notice by a week, Marcus added.
Satisfied with the arguments, Judge Louw then ruled that “the matter has been removed from the roll and costs are reserved”.
In his founding affidavit, Xolani Mkhwanazi, deputy chairperson of the PIC board, had argued it would be “objectively impossible” for the PIC to recover the money.
This was because Ayo was confident the shares the PIC purchased were valid, and would resist attempts by the asset manager to recoup the money.
He had insisted the notice was “irrational and unreasonable”, and the process followed by the CIPC had been “procedurally unfair and unlawful”.
The notice required an outcome – the recovery of the funds – without indicating the legal basis on which such a recovery could occur, or what steps were to be taken or were required to reach the stipulated outcome within the period prescribed by the notice, Mkhwanazi argued.
For its part, Ayo had also filed its own separate court papers two weeks ago. Chief executive Howard Plaatjes had asked the court to interdict and restrain the CIPC from enforcing the compliance notice. He had also sought an order prohibiting the PIC from complying with the notice.
At the centre of the battle is the PIC’s investment in Ayo in December 2017. The asset manager had bought a 29% stake in the technology firm at R43 a share in the listing. Media reports later alleged the share price had been inflated; sparking questions from the JSE, Financial Sector Conduct Authority, the PIC and CIPC.