Deputy Minister of Finance Mondli Gungubele testifying at PIC Commission of Inquiry. Picture: Oupa Mokoena/African News Agency (ANA)
In his testimony to the Public Investment Corporation (PIC) Commission of Inquiry into impropriety and corruption under former chief executive Dan Matjila’s tenure, Deputy Minister of Finance Mondli Gungubele delivered testimony riddled with inaccuracies and contradictions.

Gungubele claimed it was proven a transaction involving AYO Technology Solutions flouted PIC governance procedures and approval processes.

He said various employees participated in the process, “but it is clear that the key event took place on December 14, 2017, when former chief executive Dr Matjila signed a subscription agreement for R4.3billion without the requisite authority and or following due processes”.

Tuesday’s testimony from Dudu Hlatshwayo, a director at the PIC, revealed that the forensic report commissioned after a Standing Committee of Public Accounts (Scopa) meeting was a preliminary report riddled with factual inaccuracies.

Hlatshwayo testified that Gungubele, chairperson of the PIC, refused board members an opportunity to interrogate the facts of the preliminary audit report and forced board members to take PIC decisions related to AYO Technologies based on a draft report.

The day before Hlatshwayo’s testimony, Deon Botha, head of corporate affairs at the PIC, revealed that most media reports regarding AYO Technologies were based on incorrect information. On Monday, a PIC insider who cannot be named told Independent Media the forensic report that served as proof of AYO’s “wrongdoing” was hastily put together. It was based on inaccurate reports, some coming from the media in an effort to get rid of Matjila so Gungubele could employ a chief executive who would do his bidding.

The PIC source said: “That explains why the board was deeply divided on the matter. When the voting for a new chief executive took place, it was split down the middle and Gungubele made the casting vote which resulted in the appointment of Matshepo More, who was prepared to do his bidding.”

Gungubele and Hlatshwayo corroborated the divisions in the board, and that the deputy finance minister had to make a casting vote which resulted in the appointment of More.

In his testimony, Botha said: “In retrospect, following testimony at the commission by the head of the internal audit, Lufuno Nemagovhani, as well as assistant portfolio manager in listed equities, Victor Seanie, it seems media statements issued by the PIC and attributed to me, might have contained factually incorrect information.”

Cross-examined by evidence leader Jannie Lubbe, Botha said based on this statement, he conceded that most media reports regarding AYO Technologies were factually incorrect.

Whether or not these were associated with correct processes, the fact was that the PIC had issued unreliable information pertaining to its deals.

This ostensibly meant this had been the case for a wide range of other deals. The question then is who stands to benefit from the destruction of Ayo Technologies? Who are the company’s main competitors? One that stands to benefit is technology group EOH, formerly led by businessman Asher Bobot.

In almost every transaction where the PIC has lost billions, especially in white-owned companies listed on the JSE, the PIC has claimed its investments were above board.

Even when Steinhoff was going under, the PIC had appointed a board member to sit on the Steinhoff board, yet failed to anticipate the monumental collapse of the company’s share price, which cost pensioners R24bn.

It is shocking that after the country was brought to its knees by the fraudulent activities of Markus Jooste at Steinhoff, the agenda, as perpetuated by the media, would shift its focus to AYO Technologies instead of dealing with Steinhoff and other companies such as EOH, which saw its share price go on a downward spiral.

Just last year, EOH and five of its executive directors were blacklisted from doing business with the government, after the National Home Builders Registration Council and the National Treasury placed the company on the database of restricted suppliers.

The blacklisting is alleged to have led to a massive restructuring in the company and a new chief executive.

AYO Technologies continues to operate at a profit based on the group’s financial statements from last year.

In 2017, it collected revenue of R479million and continues to employ thousands of people. It has never operated at a loss since its inception.

Business Day refers to AYO as never having had revenue of more than R12m. The facts, as revealed by AYO, are that it is an ICT investment holding group with underlying investments and subsidiaries. AYO’s audited financial statements for the 12 months ended August 31, 2018, show AYO generated revenue in excess of R638m.

On Tuesday, AYO Technologies responded to the Business Day report: “AYO is perturbed to learn through a newspaper article that the Companies Intellectual and Property Commission (CIPC) had directed the directors of the Public Investment Corporation (PIC) to recoup the PIC’s investment in AYO.

“It is of concern that a newspaper has been informed of such a letter prior to AYO having been appraised of it.

“AYO believes that the CIPC, by failing to inform and provide it with a copy of the alleged notice to the PIC, has acted contrary to the provisions of the Promotion of Administrative Justice Act, 3 of 2000.”

This raises another important question. If the board of the PIC is in limbo and dysfunctional, following en masse resignations at the institution and witness testimonies at the commission, does it make sense for any remaining PIC directors to ask AYO Technologies to pay back any money when it may find itself incapacitated in decision-making processes while the PIC Commission of Inquiry is underway?

* Mdluli is a special investigations reporter for Voices360. He is also the national spokesperson for the Forum for Journalists for Transformation in SA.