JSE censure and fines for directors’ failures in AYO’s 2018 interims
THE JSE YESTERDAY censured and fined an AYO Technology Solutions director and a director of its parent African Equity Empowerment Investments (AEEI), following an “ongoing” investigation by the JSE.
Naahied Gamieldien, a former chief financial officer of AYO, and Abdul Malick Salie, a former director of AEEI, were censured and fined R250 000 by the JSE, in further findings in relation to AYO’s 2018 interim results. The JSE has already fined AYO R6.5 million on matters relating to these results.
The companies declined to comment on the matter yesterday.
Regarding Gamieldien, the JSE said in a statement that a day after AYO listed in 2017 it entered into three performance management agreements (PMA) with asset manager 3 Laws Capital, which would manage funds invested on behalf of AYO to diversify AYO’s treasury risk function.
Sekunjalo Investment Holdings held 85% of 3 Laws, while Sekunjalo Investment also held 61% of AEEI, which in turn held 49% of AYO.
Therefore, the JSE said 3 Laws was a related party to AYO in terms of listings requirements.
The JSE said on March 12, 2020, the commission of inquiry report into allegations of impropriety at the Public Investment Corporation was published, which included an analysis of 3 Laws’ Nedbank current account indicating the movement of monies between AYO, Sekunjalo Capital and 3 Laws.
“Based thereon and after robust investigation and engagement with AYO, the JSE discovered the funds were not invested by AYO with 3 Laws in accordance with the terms and provisions of the PMAs and that the transfer of funds to 3 Laws constituted related party transactions in terms of the listings requirements.”
The JSE said Gamieldien, as chief financial officer at the time, had omitted to disclose a material investment of R400m paid to 3 Laws on March 5, 2018 as a post-balance sheet event in line with accounting principles.
Meanwhile, the JSE said Salie, a chartered accountant of more than 10 years post-qualification, and former chief investment officer of AEEI, “ought to have known that effecting adjustments to certain line items in AYO’s financial statements for which he had no knowledge, context or understanding could result in non-compliance with IFRS (international financial reporting standards).”
“Salie’s role in adjusting the specific line items in AYO’s unaudited 2018 interim results caused and/or contributed to AYO breaching IFRS and the listings requirements for which the JSE imposed a financial penalty.
“Furthermore, AYO’s restatement directly impacted the parent company, AEEI’s consolidated results for the interim period ended February 28, 2018, which also had to be restated as a result of AYO’s corrections,” the JSE said.