The PIC invested in AYO in 2017 for a 29percent stake.
In a SENS announcement yesterday, AYO notified its shareholders that it sought to interdict the PIC from acting on the notice and taking any further action in connection with it. AYO also sought to have the notice set aside, which had given until Thursday for the recovery of the funds.
“AYO maintains that the uptake by the PIC of its listed shares through a private placement in December 2017 was fully transparent and complied with all the necessary legal requirements and will defend any action which seeks to undermine AYO’s contractual rights,” the group said.
At the end of last month, the CIPC issued a compliance notice to the directors at the PIC demanding they recoup R4.3bn the PIC had invested in AYO, together with interest for six months on the amount. There was a threat of criminal prosecution if the PIC did not comply within 15 days, which falls due this Thursday.
In a press statement yesterday AYO said it and its advisers believed that the CIPC had no legal authority to issue the PIC with such a notice.
“To demand that the PIC recovers its investment from AYO within 15 days flies in the face of established commercial practices and seriously undermines contractual rights and remedies that parties have in any potential civil disputes,” it said.
The group explained that prior to the launch of AYO’s interdict and application, AYO requested the PIC to advise whether it would act upon CIPC’s notice, but because the PIC failed to answer whether it would act or not, AYO was compelled to proceed to court on an urgent basis to interdict the PIC from acting on the notice.
It said AYO was nonetheless pleased that the PIC - in a separate application - also instituted urgent legal proceedings against CIPC to declare the Compliance Notice to be unlawful and of no force and effect.
AYO maintained that the uptake by the PIC of its listed shares through a private placement in December 2017 was fully transparent and complied with all the necessary legal requirements and will defend any spurious action which seeks to undermine its contractual rights.
“AYO is firm there is no basis for the CIPC action and for the PIC to recoup its investment and strongly rejects the reckless using of regulators to achieve such an objective,” the group said.
Deputy chairperson of the PIC Board, Xolani Mkhwanazi, said in an affidavit filed before the court that AYO was confident the shares the PIC purchased were valid and would resist attempts by the PIC to recover the money.
Mkhwanazi said that as a result, it would be “objectively impossible” for the PIC to recover the money, adding that the process followed by the CIPC was “procedurally unfair and unlawful”.