Ayo, Ayo, it’s off to court we go after poking the bear
As much as I have been aware of the fact that Ayo Technologies was an unsound investment for the Public Investment Corporation (PIC) to have made, and have written about it as well as raising the issue with the JSE, the “criminal charges” laid against me caught me by surprise.
The charges were laid by Iqbal Survé’s brother-in-law, Khalid Abdulla, the CEO of African Equity Empowerment Investments (AEEI), the majority investor in Ayo and the company that sold a 29.9% stake in the company to the PIC.
I thought the reaction to my communication of an offer to purchase their shares, made on behalf of an offshore buyer and at a market-related valuation at that time, was extreme to say the least.
Little did I know that by communicating the offer, I was actually poking the bear at a time when the bear did not wish to be poked.
Now the truth is starting to emerge. With the suspension of the PIC executives in charge of making the investment and the PIC commission of inquiry looking into the Ayo transaction, it is clear why AEEI and all those involved were nervous. And after this weekend’s revelations, they have reason to be.
But let’s back up. Ayo Technologies, a nothing company owned by AEEI, listed on the JSE on December 21 2017 at a lofty valuation of R14.8bn, premised entirely on a R4.3bn investment by the PIC and a prelisting statement full of ridiculous projections based on Ayo buying out AEEI’s 30% stake in British Telcom SA (BTSA) for R990m, a valuation the directors of Ayo described as “inflated”.
If the “sale” had succeeded, the money would have flowed to AEEI, and AEEI could have paid a special dividend to its shareholders, including Survé, who owns 40% of the company. So R396m of the R990m could have landed in Survé’s pocket.
Based on the leaked voice recording revealed by Sunday Times, we now know BTSA pulled the plug on the transaction due to the potential of being involved in corrupt activities. So Survé had to appease the PIC executives who approved the transaction outside of formal procedures.
Instead of telling the truth, he conveniently concocted a story of “toxic market conditions” not being conducive to the transaction going ahead. His “co-conspirators”, including Abdulla, happily indulged in the deception. Without the BTSA deal to explain the investment, and possibly robbed of their commission, the PIC executives had a real problem on their hands. We also now know the JSE was aware the transaction was rushed as the PIC did not have R4.3bn at listing date and had to liquidate other investments to inject the cash into Ayo after listing.
Shortly after the fateful recorded meeting, the directors of Ayo resigned. Among them were two decent people who, aware of the seriousness of the situation, wrote a memo to the board of Ayo citing potential breaches of corporate governance. Those breaches included a non-interest-bearing loan of R400m made by Ayo to Survé’s 3 Laws Capital.
In the meantime, the share price of Ayo has been skilfully manipulated for months by Survé or Survé-related parties to inflate its value, a fact ignored by the JSE despite numerous articles on the issue. Fortunately, the truth is starting to emerge, perhaps in time to salvage some of the money.
Let me finish by quoting Survé’s threat made in December 2018 to all those who dared criticise him: “How much is the truth worth? Well, if you are Dr Iqbal Survé, chairman of Sekunjalo Investments Holdings and executive chairman of Independent News Media, it could be billions of rands.”
I don’t like empty threats and therefore lodged a claim for defamation against Independent Media, Ayo Technologies and others (case number 18168/18) on December 3 2018, and another against Survé, Independent Newspapers and others (case number 1181/2019) on January 30.
See you in court, Dr Survé.