South Africa - Pretoria - 02 April 2019. The chairman of the Sekunjalo Group Dr Iqbal Survé testifying at the PIC Commission of Inquiry. Picture: Oupa Mokoena/African News Agency (ANA)

PRETORIA – The investment by the Public Investment Corporation (PIC) into AYO Technology Solutions Limited (AYO) was a viable investment and remains a viable investment, the PIC Commission of Inquiry was told Tuesday.

This was according to Sekunjalo Investment Holdings chairperson Dr Iqbal Survé, who told the commission, led by Judge Lex Mpati, that the PIC’s investment was not at risk unless the asset manager continued to be negative and create obstacles in the path of AYO, preventing it from achieving its full potential.

“The transaction with British Telecom (BT) did not materialise, because of the conduct of the PIC in being ambivalent in its position instead of supporting the finalisation of the transaction,” said Survé. 

The commission heard that the relationship between AYO and BT was premised on the fact that AYO planned to subscribe for 99 percent of the issued shares of Kilomax Investments, which holds 30 percent of the issued shares of BT, post the listing.

In addition to being an equity holder in BT, AYO had entered into a BT Alliance Agreement, in terms of which, AYO would be one of BT’s strategic partners in South Africa – as per AYO’s pre-listing statement. AYO concluded the BT Alliance Agreement on December 12, 2017.

Survé told the commission that the final pre-listing statement (PLS) that was submitted had been through several drafts before advisers, PSG Group, African Empowerment Equity Investments, Webbers, TGR Attorneys and BDO auditing firm, who were all comfortable with it. 

The JSE also received five submissions from AYO, the first of which was submitted to the JSE on November 10, 2017. 

Survé also submitted to the commission that AYO’s agreement with the PIC was concluded on December 18, 2017. He quoted from the PIC’s founding affidavit in an application before the Gauteng High Court, deposited by Xolani Mkhwanazi – the deputy chairperson of the PIC board – where it stated: “With the signature of the irrevocable undertakings, PIC was bound to purchase shares in AYO, subject only to AYO allotting shares to the PIC. The allotment occurred for 99 782 655 shares, with a value of R4.3 billion and was notified to PIC on December 18, 2017.” 

He said the transaction had, therefore, been concluded and completed at this stage. “Notwithstanding the absence of there being any conditions precedent, AYO nevertheless continued to engage with the PIC as an important strategic shareholder on a number of the new issues.”

Survé also submitted to the commission that the PIC had made no investment in Sagarmatha and it had no financial exposure whatsoever to that transaction.

He also said the investment by the PIC in Independent Media was an arm’s length transaction. Its exposure, if any, is limited. Sekunjalo has made an offer to the PIC and awaits formal communication.