PIC considers AYO anti-dissipation order

The Public Investment Corporation (PIC) is engaging with stakeholders to safeguard its indirect stake in information and communications technology service management company Ayo Technology Solutions.

The PIC’s acting executive head of legal counsel, governance and compliance, Lindiwe Dlamini, told parliament’s standing committee on finance on Tuesday that the institution is considering issuing an anti-dissipation order to prevent Ayo from allegedly transferring funds offshore.

The committee held a question and answer session on the PIC’s annual report and financial performance for the 2018-19 financial year.

Ayo released a Stock Exchange News Service announcement on Wednesday refuting allegations that it is siphoning funds abroad, saying they are “without merit”.

“Ayo, being a SA company and operating under the laws of SA, would need to follow the same process as any other company wishing to transfer funds offshore, by applying to the South African Reserve Bank [Sarb] for approval prior to executing such an offshore transfer,” it said.

The disgruntled company added it hasn’t made any application to Sarb, nor does it intend to.

Ayo says its lawyers have sent a letter to the PIC, which includes details of the various accounts (and account numbers) in which its funds are held at SA banks.

The PIC said it is aware of the allegations circulating and that it is taking legal action against Ayo because it is the appropriate and responsible stance to ensure that the value of its assets is protected for the benefit of its clients.

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

In a statement on Wednesday the PIC said the Western Cape High Court in Cape Town issued a summons against Ayo in May.

“The PIC’s claim is based on two alternative causes of action, which are misrepresentation on the part of Ayo when the transaction was concluded and the principle of legality. As relief, the PIC has tendered back the shares bought from Ayo in return for repayment of the invested amount of R4.3 billion.”

The corporation also refutes claims by the chair of investment company Sekunjalo, Dr Iqbal Surve, that the PIC’s comments to parliament and last week’s Financial Sector Conduct Authority (FSCA) raids are related.

“The PIC is not a party to any regulatory investigation by FSCA into Dr Surve, or his business entities, that led to last week’s search-and-seizure operation by FSCA,” says the PIC.

Linking the two events would be “factually misplaced, opportunistic, flawed and deceitful”.

It will make no further comment until “real legal proceedings” are instituted.