Executives suddenly quit Survé’s tech firm
Resignations of CEO and CIO ‘followed grilling by the board’
● Ayo Technology Solutions, the company into which the Public Investment Corporation pumped R4.3bn late last year, announced the resignations of its CEO and chief investment officer on Friday.
It said CEO Kevin Hardy, who was appointed in January, and CIO Siphiwe Nodwele had resigned with immediate effect on Friday, but it did not say why.
Naahied Gamieldien, the current CFO, would act as CEO while retaining her position, the company said. Nodwele’s position will not be filled immediately.
A statement from newly elected board chairman Wallace Mgoqi said changes to the executive team had “indicated just how committed and seriously we take corporate governance”.
When approached for comment, the PIC told Business Times: “We have had several engagements with the company and are comfortable that governance issues are being addressed.”
Ayo has been one of the PICs more controversial investments, largely due to its links to businessman Iqbal Survé, whose ties with the PIC and its CEO, Dan Matjila, have come under scrutiny over a deal which would have seen the PIC give R3bn to Sagarmatha Technologies — another of Survé’s companies — to help it list on the JSE. The deal was abandoned after intense public and political scrutiny.
The PIC had previously invested close to R1bn to support Survé’s purchase of Independent News and Media SA in 2013. About R408m of the debt was due for repayment on August 17. When asked for comment this week, Survé’s chief of staff Zenariah Barends said the company did not “discuss our business with our competitors”. Independent Media, as it is now called, publishes The Star, The Mercury and The Cape Times.
The PIC said it could not comment on the loan repayment or its planned exit from the Independent investment as the terms were confidential.
In May the PIC announced an investigation into its investment in Ayo to ensure all PIC investment processes were adhered to. In June Independent’s business daily Business Report reported that the PIC’s investment committee supported the deal and had found all processes had been followed.
This month the Treasury said President Cyril Ramaphosa had agreed to appoint a commission of inquiry into alleged improprieties at the PIC, which invests nearly R2trillion in civil pension and unemployment insurance funds.
PIC says it will investigate its R4.3bn investment in Ayo Technology Solutions
Back at Ayo, Hardy’s and Nodwele’s exits follow Wednesday’s announcement of a board restructuring after the company had met with shareholders. A board member, who spoke on condition of anonymity, said the pair resigned after the board had grilled them about complaints from customers, specifically that they were not available to deal with their needs.
“They resigned after the board started to ask tough questions. They think they are in charge of us,” the board member said.
Hardy and Nodwele could not be reached for comment.
Khalid Abdulla, Walter Madzonga, Telang Ntsasa and Mbuso Khoza resigned as board members. Salim Young stepped down as independent nonexecutive chairman but remained as independent nonexecutive director.
Mgoqi was appointed chair. Other new board members are Dennis George, the general secretary of the Federation of Unions of SA, businessman Sello Rasethaba and Rosemary Mosia, who is the owner of Bridge Hope Wines. They were appointed as independent nonexecutive directors with immediate effect.
A new company secretary would also be appointed after Nobulungisa Mbaliseli returned to shareholder African Equity Empowerment Investments Limited, from where she was seconded.
The board said it had consulted shareholders on “strengthening the independence and governance structures of the board to ensure a stronger representation of independent nonexecutive directors”.
It would also recruit senior ICT specialists to strengthen its executive team.
The company says it is one of the largest JSE-listed BEE ICT groups in the country and claims to provide turnkey ICT products and services to local and international clients.
Ayo listed on the JSE in December last year with a market capitalisation of R14.7bn. Its share price is down 42% year to date, according to Bloomberg data, and was trading around R26 on Friday. At the time the PIC bought its 29% stake, the share cost R43.
Few analysts track the stock. One, who spoke anonymously, said the PIC’s investment was “quite contentious” with its evaluation suggesting the company had not been fairly valued.
Survé’s African Equity Empowerment Investments holds 49% of Ayo. The SA Clothing and Textile Workers Union, the Police and Prison Civil Rights Union and the Federation of Unions of SA are other shareholders.
They resigned after the board started asking them about customer complaints Board member
Ayo Technology Solutions