CAPE TOWN - FINANCE Minister Tito Mboweni told the Parliamentary Standing Committee on Finance (SCoF) that what is due to the Public Investment Corporation (PIC), as a dividend from the investment, must come to the PIC.
This was with reference to the asset manager's exposure to JSE-listed AYO Technologies and the Sekunjalo Group during the Finance Ministry and the PIC's briefing to SCoF.
“We must be very careful about saying things that will end up destroying businesses. I agree that the board of directors within the PIC has put in place a process which has requested retired Judge Mokgoro to go through the many recommendations and provide professional advice on the way forward.
“I think it would be very wrong to tarnish the whole AYO organisation or the whole Sekunjalo organisation based on this,” said Mboweni.
PIC chief executive Abel Sithole assured SCoF that the money invested in AYO was still there.
“We have instituted action to try and preserve but the requirements in law to force that kind of preservation are quite onerous. But we are keeping an eye on how those assets in AYO are being treated by the organisation.”
AYO said in June that its results showed strong cash balances and no debt. The company said its asset base was in excess of R5 billion.
Chief executive Howard Plaatjes said in November that it had managed to navigate much of the Covid-19 fallout and maintained stable revenue growth in the year to August.
AYO lifted revenue by 47.44 percent to R2.89bn in the year, but operating profit fell due to the constrained operating environment through the lockdowns and the lower interest rates.
During the briefing to SCoF, Mboweni proposed an engagement between the committee, the chairperson of AYO Technologies, Dr Wallace Mgoqi, and Sekunjalo Investment Holdings (SIH) executive chairman Dr Iqbal Survé on the PIC's investment in AYO.
“I think that maybe this committee should invite the chair of AYO and Sekunjalo … to have a conversation on how these arrangements wre made,” Mboweni said.
Survé welcomed the minister's proposals for an engagement with Parliament. He said there was a concerted effort to undermine the role played by the companies in which SIH had invested, including AYO and Independent Media SA (INMSA), to rebuild the country's economy.
“While I cannot directly comment for AYO, I can say that since the institution of the Mpati probe, SIH and INMSA, as well as AYO, have been consistent in their position that their relationship with the PIC has always been within the law,” said Survé.
Survé said since the release of the Mpati report, he sought to engage with the asset manager on the commission's findings as they pertained to SIH, INMSA and the Sekunjalo Group.
“To date, our attempts to engage with the PIC have not borne any fruit. It is against this background that the pragmatic approach adopted by Minister Mboweni is welcomed. We also stand ready to engage with Parliament's SCoF in order to set the record straight once and for all,” he said.
SIH is an indirect investor in AYO, through African Equity Empowerment Investments (AEEI), in which SIH holds a stake. The continuous reference to AYO being his is, “false and reckless and needs to cease,” he said.
SCoF also raised concerns about the PIC's exposure to JSE-listed Naspers and cautioned that should anything go wrong the PIC would stand to lose more than R200bn in value.
The PIC has significant exposure to Naspers of about R229bn.
BUSINESS REPORT