PIC Inquiry: Dan Matjila defends investment in AYO
Companies / 25 July 2019, 08:59am / Kabelo Khumalo
Pretoria - Erstwhile Public Investment Corporation (PIC) chief executive Dan Matjila on Wednesday defended the asset manager's R4.3 billion investment into Ayo Technology Solutions in 2017, saying the outlay was strategic for the PIC.
Matjila told the commission of inquiry tasked with investigating allegations of improper conduct at the PIC that the investment into AYO gave the PIC exposure to the growing information and communications technology (ICT) sector.
“Furthermore, the fact that it was black-owned would position it strongly to pursue opportunities to enhance BEE credentials of its customers.
"This asset fitted the GEPF’s mandate as a long-term investor, giving it exposure to the right technology assets and thus enhancing the sustainability of the portfolio,” Matjila said.
The PIC participated in the private placement of AYO shares in December of 2017 and took 28.9percent interest in AYO for R4.29bn.
The listing of AYO saw it become the largest black ICT company on the local bourse.
However, media reports and testimony before the commission have alleged the PIC overpaid for its stake in AYO and that Matjila had pressured junior staff to push the deal through.
Matjila denied the allegations, charging that due diligence processes were followed in the decision to invest in the company.
“The outcome of the due diligence process was the conclusion that AYO was an appropriate and attractive investment for the PIC,” he said.
Matjila told the commission he left his role at the PIC in November last year due to political interference at the asset manager.
The PIC has since served AYO with a summons demanding it pay it back the R4.3bn it invested due to misrepresentation.
AYO has in turn announced its intention is to sue the PIC and other entities for damages.
Suspended acting PIC chief executive Matshepo More has told the commission Matjila had kept her in the dark about details around the AYO transaction.
Matjila on Wednesday explained why he did not contact More before he signed off the subscription form.
“More and I are in a similar situation because we rely on advice from the technical people, they are the ones who do the work and make recommendations to us,” Matjila said.
“So it wasn't necessary to ask her (More) because she is not doing the technical work anyway.”
Matjila also addressed allegations that the PIC invested into AYO without having interrogated its audited financial statements.
He said the pre-listing statement (PLS) of AYO was enough for the PIC to make an informed decision on the AYO investment.
“The PLS has got very stringent requirements.
"This includes the right financials being approved by an accounting firm to ensure that the information is reliable and legal and other aspects of the PLS are all signed off by JSE approved firms to give comfort to any investor that they can use the information in the PLS.”
Matjila, who has been on the witness seat for the past two weeks, will continue to give the commission his testimony today.