PIC, CIPC, AYO in courtroom showdown
THERE was a showdown at the North Gauteng High Court between AYO Technology Solutions, the Public Investment Corporation (PIC) and the Companies and Intellectual Properties Commission (CIPC) – the government’s database of corporate ownership.
This as United Democratic Movement leader Bantu Holomisa dropped one bombshell after another at the Mpati Commission of Inquiry into allegations of impropriety at the PIC.
In two separate cases in front of Judge Cornelius van der Westhuizen, the CIPC faced off with the PIC, which is seeking to have a compliance notice issued by the CIPC against its directors set aside, on the basis that it was irrational and unreasonable and that the process followed by the CIPC was “procedurally unfair and unlawful”.
The compliance notice issued by the CIPC was to instruct the directors of the PIC to recover its R4.3 billion investment into AYO.
Gilbert Marcus SC, for the PIC, said there were a number of red flags in the CIPC’s application, stating that the grounds provided by the CIPC to issue the compliance notice was based on factual errors.
Marcus contended that the CIPC claimed in its issuing of the notice that the PIC board had made a decision to invest in AYO.
According to Marcus, this was not the case, as the board was not responsible for signing off the transaction. This was factually incorrect as the decision to invest in AYO was taken through the PIC’s corporate structures.
Frans Arnoldi SC, for the CIPC, argued that it was neither here nor there if the board had approved the transaction.
Ultimately, he insisted, the buck stopped with them.
In another matter held in the same sitting, the CIPC and PIC also faced off as the first and second respondents against AYO, which had launched an urgent application to interdict the CIPC’s compliance notice and have it set aside on the basis that it was unconstitutional.
Nazeer Cassim SC, for AYO, said the granting of the compliance order would not only set a dangerous precedent, but would also have disastrous consequences for the South African economy.
The CIPC issued the notice on February 21, giving the PIC just 15 days to reclaim the money it used to buy a 29% stake in AYO.
The CIPC announced earlier this week that it had extended the recovery deadline from 15 days to 60 days.
Both cases have been reserved for judgment on Monday.