PIC may take legal action against Ayo Technology

The Public Investment Corporation (PIC) says it is engaging with the relevant stakeholders to safeguard its indirect stake in Ayo Technology Solutions.

This comes after Lindiwe Dlamini, the PIC’s acting executive head of legal counsel, governance and compliance, appeared before Parliament’s Standing Committee on Finance on Tuesday, saying the institution is considering issuing an anti-dissipation order to prevent the ICT company from allegedly transferring funds offshore.

The committee held a question-and-answer session on the PIC’s annual report and financial performance for the 2018/19 financial year.

‘Siphoning’

Ayo released a Sens announcement on Wednesday morning refuting allegations that it is siphoning funds abroad, saying they are “without merit”.

“Ayo being a South African company and operating under the laws of South Africa would need to follow the same process as any other company wishing to transfer funds offshore by applying to the South African Reserve Bank (Sarb) for approval prior to executing such an offshore transfer,” it read.

The disgruntled ICT company adds that it hasn’t made any application to Sarb to transfer funds offshore, nor does it intend to do so.

Ayo says its lawyers have sent a letter to the PIC, which includes details of the various accounts (and account numbers) in which its funds are held at South African banks.

However, during the question-and-answer session, the PIC said it is also aware of the allegations circulating. It said it is taking legal action against Ayo because it is the appropriate and responsible stance to take to ensure that the value of its assets is protected for the benefit of its clients.

“The PIC will continue to do so through due and proper legal processes, including co-operating fully with any law enforcement agencies or regulatory bodies.”

Summons issued

In a statement on Wednesday, the PIC said the Cape Town High Court issued a summons against Ayo in May.

“The PIC’s claim is based on two alternative causes of action, which are misrepresentation on the part of Ayo when the transaction was concluded and the principle of legality. As relief, the PIC has tendered back the shares bought from Ayo in return for repayment of the invested amount of R4.3 billion.”

Denial of more claims

The corporation also refutes claims by Sekunjalo chair Dr Iqbal Survé that the PIC’s comments during Tuesday’s Parliamentary session and last week’s Financial Sector Conduct Authority (FSCA) raids are related.

“The PIC is not a party to any regulatory investigation by the FSCA into Dr Survé or his business entities that led to last week’s search and seizure operation by the FSCA,” says the PIC.

It says linking the two events would be “factually misplaced, opportunistic, flawed and deceitful.”

It says it will make no further comment until “real legal proceedings” are instituted.

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