AYO, PIC set for legal showdown

The PIC made a R4.3 billion investment for a 29% stake in AYO back in 2017 when AYO listed on the JSE, but now wants its money back

Much of the PIC’S alleged motivation behind its approach to the courts has relied on what has now been shown to be false, wrong and discriminatory reporting ....

THE Public Investment Corporation (PIC), guardian of 82% of the Government Employees Pension Fund’s (GEPF’S) portfolio, is headed to court tomorrow in a desperate bid to claw back funds it invested in Jse-listed AYO Technology Solutions (AYO) five years ago.

The PIC made a R4.3 billion investment for a 29% stake in AYO back in 2017 when AYO listed on the JSE, but now wants its money back, with interest, despite having benefited from its investment through dividends of more than R400 million.

The court matter goes back to May 2019 when the PIC which describes itself on its own website as an asset manager, but in this instance, describes itself as an organ of state, and the GEPF, which describes itself as Africa’s largest pension fund, issued summons to AYO.

The summons sought a declaration that the subscription agreement entered into by the PIC with AYO, be declared unlawful and set aside.

The summons also requested that “AYO be ordered to pay the PIC R4290654165, with interest of 10.25% per annum accrued from December 22, 2017, to the date of final payment”.

AYO, which counts among its shareholders unions and black empowerment groups, instructed its attorneys to oppose the action.

Much of the PIC’S alleged motivation behind its approach to the courts has relied on what has now been shown to be false, wrong and discriminatory reporting by much of South Africa’s mainstream media.

AYO has been constantly on the receiving end of negative media reports and litigation, yet despite this, the group has managed to grow its investment base, which it said was now worth several billion rand.

When it listed on the JSE, AYO, which was a bundling of several well-established technology-related companies under the African Equity Empowerment Investment (AEEI) stable, was lauded.

AYO, the country’s single largest and most transformed ICT investment company, announced its results in November last year.

These showed that in the 2021/2022 financial year, AYO, which deploys a hybrid dividend policy, contributed almost R95 million to the GEPF in the form of dividends.

In its plea, which we have seen, AYO argues that the PIC is not an organ of state and, in any event, when it takes decisions to invest, such decisions fall outside the purview of review, whether as administrative action and/or the principle of legality. Whatsapp your views on this story to 071485 7995