Opinion / 3 September 2018, 06:00am / Rosemary Mosia
CAPE TOWN – A few months ago Magda Wierzycka came out guns blazing against Sagarmatha Technologies, a black-owned multi-sided platform company which was due to list on the JSE. Her rant was riddled with inaccuracies.
She completely misread the pre-listing statement, she cast aspersions on international investors, she did not understand the valuation of unicorns and she completely undermined the audit committee of the company.
As the deputy chairperson of Sagarmatha Technologies, I commented on her highly defamatory statements against the company, her grossly ill-informed understanding of the business and her downright utter lack of understanding of the business model and, of course, her skewed math.
And now she is at it again, and this time against AYO Technology Solutions Limited, another black-owned ICT company, on which I serve as an independent non-executive board member. And, she’s using the same formula, skewed math and all.
Her latest diatribe, not surprisingly hosted by Tiso Blackstar via BDlive, is riddled with inaccuracies which seem to have become her trademark – wrong facts, a poor understanding of the business model, anti-black business sentiment, disillusionment with the JSE (perhaps because they rejected her attempt at listing one of her companies) and her onslaught on those who dared to invest in the company. All of this, of course, underscored by her defamation of the company, its directors, executives and employees.
AYO has been in existence for more than 20 years, has significant businesses across the ICT spectrum. It is profitable and the company employs more than 200 highly skilled ICT people. On its own merits and against strenuous competition, AYO secured a large-scale ICT contract with Sasol.
It is no secret that AYO has a significant shareholder in the Public Investment Corporation (PIC).
In line with the PIC’s environmental, social and governance requirements, AYO recently restructured its board by co-opting a few independent non-executive directors. In addition, AYO directors who were associated with AEEI, a significant shareholder, as well as other companies within the Sekunjalo Group, were also asked to step down, in support of the plan to strengthen corporate governance.
No one “bailed or jumped ship” as Magda would like to believe. There was nothing sinister or underhanded about this; in fact, we are pretty proud of our commitment to conform to solid ethical and good governance requirements.
But according to Magda, the changes on the board had to do with a deal with British Telecommunications. Where did she come on this? What is she smoking?
Just like any company determined to excel, to achieve its business objectives and grow shareholder value, AYO must be judged on its performance. In AYO’s case, it has presented a business case to its investors to become one of the largest, sustainable, profitable and most successful black ICT companies in the country.
AYO has successfully raised capital to augment its profitable existing businesses to grow and acquire new business. Incidentally, when AYO went to market, the share issues were oversubscribed by more than R1bn, excluding the PIC. The company elected to only take up the PIC offer since its empowerment status would still be intact.
This self-same model is used by countless other companies when their executives approach investors. Their executives are innovative and forward thinking when they present business plans to grow successful companies and, notwithstanding the valuation of those companies, the market tends to applaud them for innovation.
The subliminal racism of people like Magda should not be surprising since, in their world, black people (according to Magda’s now infamous tweet), should be employed as “gardeners” and “cleaners” and by implication, should not own successful JSE-listed companies and should not be in boardrooms for anything other than cosmetic purposes, and of course, to serve the tea.
It comes as no surprise that Magda would attack the fact that AYO involved BBBEEs and union groups in their transaction, since this is precisely what subliminal racists do. In their minds, they must control the BBBEEE groups so that economic power rests with them.
The fact is that the BBBEEs and union groups were offered shares in order to strengthen the BEE shareholding of AYO to comply with Icasa as well as customer requirements. And this was no secret.
But what is Magda actually protecting? A privileged minority, racial arrogance, hypocrisy, of course, whilst enriching herself at the expense of the new South Africa. Ironic? Her role in undermining a black business icon with African Harvest is an important story that must still be told. Watch this space – it is time that South Africa gets to know the real Magda.
I believe that AYO is the victim of an orchestrated and organised disinformation campaign with the sole purpose of undermining its legitimate business and to prevent black business success in South Africa.
Magda and her ilk should be called out and held accountable for promoting a narrative which is deliberately in conflict with the transformation of the South African economy and the country’s social order.
The JSE consists of several companies which have been the subject of massive value destruction in recent times, with billions of rand being lost. Just take a look at MTN, Woolworths, Steinhoff, Group Five, Aveng and Lonmin, to name a few.
And then there is the matter of her distorted understanding of the valuation of ICT companies. Any person who can read financial statements will tell you that ICT companies are valued on future earnings and not on net asset value. One just has to look at the mighty Dimension Data and at its peak, EOH which, by the way, missed Magda’s beady eye – and look how their value has plummeted.
We have yet to hear Magda commenting on these companies, including her own which share prices has halved in recent times. Her racial bias is shocking. AYO has not lost a cent for any shareholder and is yet to deploy its capital for the benefit for all shareholders. The hypocrisy is that any other company would be given the time and space to execute its business plan. In AYOs case, there is a deliberate attempt to undermine, sabotage and stifle its business plan. After doing all of this, they claim that AYO is not successful.
Magda has deviously even gone so far as to put pressure on Sasol to cancel the AYO contract. This is shocking in the extreme since AYO has done absolutely nothing wrong. It speaks to a deliberate sabotage of a legitimate black business. I hope that AYO institutes a law suit for damages against Magda and others should the Sasol contract be undermined.
Magda’s other obsession is the PIC’s investment in Independent Media. It is public knowledge the PIC did not lend R2.2 billion to Independent Media, as she claims in her BDlive column. The facts are that the PIC invested R1bn as part of a consortium of investors, which included the Chinese Development Bank and Sekunjalo.
She deliberately distorts the facts to create the impression that a large amount of funds has passed from the PIC to Independent Media. Perhaps I should remind Magda the PIC had an investment of approximately R4bn in Tiso Blackstar (formerly Times Media Limited/Avusa), the very same media company that she uses to promote her tirades, which today, is probably worth less than R300 million.
She is completely quiet about how Tiso Blackstar and its privileged owners, have destroyed pensioners’ money through their value destruction of the company. At one stage the PIC owned 25 percent, directly and indirectly, of Tiso Blackstar and the shares were trading as high as R48. Today the shares are worth R3.50, which is less than 10 percent of the value.
Does Magda comment on this? Perhaps her obsession with Independent Media and the PIC are precisely to draw attention away from the real value destruction that is taking place at Tiso Blackstar.
Magda scoffs at AYO for paying its advisory company a placement fee following its JSE-listing. Why? Virtually every company that lists on the JSE and in fact any exchange in the world, pays placement fees, there is nothing unusual about that. Perhaps the reason why she chooses not to pay an advisory company because she rewards herself and her family trusts with generous share options while also raking in more than R10m a year from renting premises to Sygnia, according to the 2017 annual report. Talk about enriching yourself at the expense of shareholders and investors!
In her most recent BDlive column and with reference to AEEI, Magda unashamedly lies when she suggests that she is not in control of who buys shares, implying that AEEI bought the shares on the open market. The truth is, not only was AEEI and Sekunjalo approached as part of the placement for the listing of Sygnia in 2015, but were approached a second time in 2017, to underwrite the rights offer when Sygnia needed cash to fund an acquisition. Both AEEI and Sekunjalo followed their rights. This is another example of how Magda is economical with the truth and the facts.
Magda the last time I wrote an article about you, you were quiet. Today I am addressing you again. There are some serious issues concerning my previous article about you. Are you too afraid to address me?
Let's make a call for the JSE to investigate all businesses, black and white, and not just respond to calls like those of Magda – otherwise the JSE would be party to bias and racism which will be a sad day in the history of this country for regulators when they are influenced by people and businesses with agendas.
Magda, trying to paint yourself as paragon of virtue while actually being a paragon of subliminal racism is fake, very fake. I for one, will not be fooled. Donald Trump would be proud of you, but not me.
Rosemary Mosia is an independent non-executive director of AYO Technology Solutions Limited and the deputy chairperson of Sagarmatha Technologies. She holds a BComm Accounting degree from the University of the North; a postgraduate diploma in management at Wits Graduate School of Business; a Masters in Business Leadership from Unisa and she is currently studying towards a Higher Certificate in Tax Law at UCT.
The views expressed here are not necessarily those of Independent Media.