A Public Investment Corporation (PIC) senior investment committee in May 2018 approved a R4.3 billion share for cash transaction with AYO Technology Solutions (AYO) in a report that was signed by the PIC chairman, five of its senior directors and most of its executive team, the Western Cape High Court heard yesterday.
AYO legal representative Nazeer Cassim (SC) yesterday, during his continued cross-examination of PIC witness Victor Seanie, a dismissed assistant portfolio manager of the PIC, read out documents showing that PIC policies allowed for transactions of less than R10bn to be ratified by the PIC, and then subjected to normal PIC transaction approval processes at a later stage.
This contradicted Seanie’s former claims, which he reiterated yesterday, that he believed the transaction was corrupt as it had bypassed ‘normal’ PIC transaction vetting processes.
The PIC, the state-owned asset manager that invests mainly the Government Employee Pension Scheme funds, is attempting through the court to recover R4.3bn it invested for a 29% stake in AYO, when AYO listed in 2017. The investment was incurred through the PIC participating in the AYO IPO through a private placement in December 2017.
Yesterday, during cross-questioning,Cassim challenged Seanie on his views on the bypassing of procedure at the PIC, which had led him (Seanie) to believe the transaction was corrupt, but Seanie could produce no other evidence to support his stated narrative.
Cassim referred Seanie to an email Seanie had written to then PIC CEO, Dr Dan Matjila, on December 15, 2017, stating: “We have done a due diligence of AYO and can recommend” that the transaction proceed, to which Seanie replied in court that this email had merely been a “rubber stamp” following an instruction sent to him to write the email by his superior.
He had testified earlier this week that the due diligence had in fact not been concluded in time before the listing date.
Seanie also told the court yesterday that at the time he did not know what the PIC standard operating policies were, he was never provided with a manual and neither was he trained in this, and he followed instructions from his superiors.
At the time of the AYO listing, he was the most junior member of the investment team, AYO being only the second IPO he had worked on at the PIC.
Seanie testified that the PIC committee’s approval in May 2018, some five months after the listing, was simply “rubber stamping” of a deal that had already been concluded on December 14, 2017, and was being approved by PIC executives who were all working in fear of losing their employment and cowed by the alleged dictatorial management style of former PIC chief executive officer Dan Matjila.
A letter in April 2018 to the Government Employee Pension Fund, detailing the PIC’s transaction with AYO, which had been compiled and signed by Seanie, claimed that a full due diligence had been concluded into AYO before the PIC investment was made.
However, Seanie claimed in court this week that this letter to the GEPF had been written by him under “duress” from Fidelis Madavo, the former executive head of listed investments at the PIC.
“I had no say over the content,” Seanie claimed.
In separate proceedings, the judge presiding over the PIC and AYO matter, Judge Ashely Binns-Ward, early yesterday morning set aside an application by the PIC to see information that was exchanged between Sekunjalo Investment Holdings and asset management firm, 3 Laws Capital, AYO, with the PIC and Government Employees Pension Fund ordered to pay the costs.
The court hearing resumes on Monday with testimony from British Telecom SA incumbent CEO, Bertrandt Delport.