We have nothing to hide: AYO dispels narrative being spread by ex-exec

By AYO Statement Time of article published Feb 4, 2019

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CAPE TOWN – This is a joint statement by the boards of African Equity Empowerment Investments Limited (AEEI), AYO Technologies Limited (AYO), Sekunjalo Investment Holdings Proprietary Limited and Dr Iqbal Survé.

For the past few months, the Sekunjalo Group has consistently complained about the unfair media campaign being launched against it and its associates. Over the past weekend, the Sunday Times has once again demonstrated its unfair and biased reporting of the Sekunjalo Group, including AYO.

The parties in this joint press statement wish to clarify events associated with the audio recording that was reported on by the Sunday Times on 3 February 2019,

Let us start off by saying that this recording has been verified as being made by one of the former executives of AYO and that such recording was made without the permission of the participants in the meeting. Having said that, the meeting was an informal discussion between senior executives in charge of the various parties to this statement, and despite the recording having been made without their permission, the participants have nothing to hide based on the contents of what was said during this confidential meeting.

The background to this meeting was an informal discussion triggered by a joint SENS announcement by AEEI and AYO on 6 August 2018 announcing that the transaction they envisaged would not be completed as planned. The transaction was the proposed acquisition by AYO of AEEI's 30% shareholding in BT South Africa Proprietary Limited (BTSA). The details of the proposed transaction are contained in numerous documented statements and SENS announcements released by AYO and AEEI over the last 18 months. The transaction was the culmination of a joint strategy to create AYO as a black-owned ICT company.

In the pre-­‐listing statement (PLS) of AYO released during December 2017, AYO expressed its intent to acquire the BTSA stake from AEEI and made certain disclosures in this regard but indicated clearly in Annexure 16 of the PLS that the sale would be subject to obtaining the prior consent of BTSA and BT plc. This was always fully disclosed to the market.

Post-listing, AYO and AEEI worked to implement this strategy which is evident by their joint SENS announcement regarding the transaction on 30 May 2018.

What later transpired post the listing of AYO is the launch of a slanderous media campaign against AYO. This unnerved a number of stakeholders that AYO had to interact with, which resulted in the slowing down of some acquisitions that AYO had targeted and the delay in a number of key contracts which AYO had promised to pursue in terms of the PLS.

AYO and AEEI were then obliged in terms of the JSE rules to release an announcement informing their shareholders that one of the conditions for the acquisition of the BTSA stake was not fulfilled and that the transaction would not proceed until the consent was obtained.

The meeting, which was surreptitiously recorded, was an attempt by the executives to get together to collectively discuss the next steps. This is not unusual in any business situation. The parties got together to sift fact from fiction face-to-face, as there were competing versions of what was happening on the ground. As can be heard from the conversation, Dr Survé wanted to dispel the narrative being spread by then CEO of AYO, Kevin Hardy, that the PIC did not wish to support AYO's acquisition of the BTSA stake.

Regarding the valuation of BTSA, because the acquisition of the BTSA stake by AYO was from a material shareholder, namely AEEI, the JSE Listings requirements categorise this as a related party transaction which required a 75% approval of shareholders, including the PIC. The Listing requirements also call for an independent valuation. The independent valuer was approved by the JSE. Therefore any issue that may have arisen around the valuation of the BTSA stake were cleared up by the independent valuer. There is nothing untoward about the transaction.

The contents of the recorded meeting clearly show that it was nothing but an attempt by the executives of AEEI and AYO to get together in pursuit of a transaction they were trying to secure and to jointly exercise and fulfil their fiduciary duties to ensure the protection of their respective companies, shareholders and other stakeholders.

The irony of the report in the Sunday Times is that the recording had memorialised the attempt by the executives to act in accordance with good corporate governance which the media is now spinning to be something negative and untoward. There is not a single lie that has been told to the PIC as has been suggested in the press report and the Sekunjalo Group, AEEI, AYO and Dr Survé continue to feel aggrieved by this unfair treatment in the public domain.

We urge the public to establish the facts before drawing any conclusions. What appears in the recording is in fact completely misconstrued in the written articles. Some examples from the Sunday Times article which illustrates its bias include:

  • using deceptive words such as "plotted", "mislead", "explosive secret recording"; and
  • nowhere does the article state what "key information" was to be withheld from the PIC.

We challenge the Sunday Times to explain, in detail, what this key information is and how this would prejudice the PIC.

The two former executives of AYO who were present at the recorded meeting resigned from AYO due to various disagreements on strategy. Their view on the transaction was a minority view which was fuelled by other ulterior motives, which will not be aired at this stage.

It is important to note that these former executives have been attempting to secure an unreasonable pay-­‐out from AYO over the last few months. This was unsuccessful.


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