AYO takes JSE fine in its stride
Accepts results did not comply with reporting standards, although no fraud perpetrated
AFRICA’S largest stock exchange, the JSE, said yesterday it had imposed a public censure of AYO Technology Solutions and a fine of R6.5 million after finding the company in breach of its listing requirements.
In a statement, the JSE said AYO’s previously published unaudited 2018 and 2019 interim results did not comply with International Financial Reporting Standards (IFRS) requirements and were restated due to numerous adjustments and material errors.
The 2019 reviewed preliminary results did not comply with IFRS in terms of classification, measurement and presentation of specific items, and contained numerous material errors which had to be corrected, the exchange said.
It added AYO failed to exercise the highest standards of care when disseminating financial information to the market.
AYO assisted the JSE in its investigation and admitted its failure to comply with these provisions of listing rules, the exchange noted.
In its response to the censure and fine, AYO said it acknowledged and respected the JSE’s findings that while no fraud was perpetrated, its results did not comply with IFRS, “notwithstanding AYO being of the opinion that the relevant IFRS rules can be interpreted differently”.
“AYO also concurs that at that time it failed to observe the highest standards of care in the dissemination of the interim financial information into the marketplace due to a new financial management team and complex acquisition transactions,” it said.
It said since the appointment of new management in early 2019, significant remedial steps had been taken to prevent a recurrence of such errors in its financial reporting.
The capability of the incumbent team had been tested and proved through three subsequent and simultaneous unqualified audits, two of which were conducted on interim results, it added.
“AYO acknowledges that trust and respect are critical factors for businesses – whether listed or not,” said the company.
“AYO’s new management team have thus worked hard to rebuild its relationship with the JSE, working with it and complying with all requests asked of AYO by the JSE, in order to resolve all issues and to prevent further questions or uncertainty arising in the future.”