In an announcement made on Monday, Sagarmatha Technologies (Sagarmatha), a Sekunjalo Group company, stated it has initiated a R50 billion lawsuit against key South African governmental and regulatory bodies, including President Cyril Ramaphosa and the Johannesburg Stock Exchange (JSE).
Sagarmatha served the section 3(1) and (2) of the Institution of Legal Proceedings Against Certain Organs of State Act No. 40 of 2002 (“the Institution Act”), by giving the respondents 6-months’ notice. Respondents also include the Minister of Justice, the Minister of Finance, as well as the South African Reserve Bank (SARB), and the State Attorney.
The company’s statement states that the various organs of state and regulatory bodies sabotaged Sagarmatha’s local and international listing.
In an interview with Dr Iqbal Survé, chairman of Sekunjalo and Sagarmatha, he shared with IOL that in 2018, Sagarmatha had worked tirelessly with the JSE to ensure that all regulations and requirements were met to ensure the listing would be approved. The JSE had also insisted that the company obtain two independent international valuations, which it duly did.
The JSE pulled the plug on the local listing at the 11th hour, with reasons that just do not stack up and that Sagarmatha dismiss as being frivolous.
However, based on the valuations that settled around a listing value of R50 billion, Sagarmatha also successfully rallied the requisite $400 million from global investors, aiming to solidify its position in the international market, as the SARB had also at the time made provision for primary offshore listings, such as that of Prosus, a division of Koos Bekker’s Naspers, to list in Amsterdam.
According to Survé, the SARB initially gave a nod of approval, confirming in writing that permission to list internationally would be granted within two months as all required criteria had been met. A year later, Sagarmatha was still waiting for final sign-off with the SARB diverting the decision to the National Treasury, hinting at a higher level of decision-making at play - allegedly influenced by political figures including President Ramaphosa.
The National Treasury, instead of offering clarity, shrouded the process in ambiguity says Survé. No definitive response was ever given, with vague references to the ongoing PIC Mpati Commission serving as a smokescreen for inaction.
According to Survé, this indecision and the alleged political interference, led to a protracted three-year delay, forcing Sagarmatha to eventually have to start their application over from scratch, a move that resulted in the loss of both the opportunity for international investment and the trust of its global backers.
According to Sagarmatha’s statement, “the listing was prevented from being realised, as too the local listing on the JSE, despite the JSE giving written approval of the listing, by a deliberate and malicious campaign to discredit Sagarmatha and Dr Iqbal Survé.”
The statement goes onto explain that: “Sagarmatha has ample evidence to support its case, and its foreign investors have also advised they are seeking legal counsel for the appropriate recourse against the identified South African persons and bodies that were responsible for derailing the listing of the company, and therefore, their investment opportunity.
“Decisions taken by President Ramaphosa and actions of state entities and regulatory bodies that have been instrumental in sabotaging Sekunjalo Group-related businesses have inflicted significant financial repercussions for Sagarmatha and caused the company immense reputational harm.
At the time of the proposed listing/s, Sagarmatha would have been the first multi-sided platform (MSP) to have been created in Africa and to have listed abroad. Now, South Africa is opening its doors to welcome the likes of other MSPs like Amazon, instead of supporting the commercial prospects of homegrown initiatives and businesses.
At a time when the nation was already grappling with alarming youth unemployment rates of 38.2%, Sagarmatha's vision was not just about financial growth but about social impact. The company was set to generate at least 5,000 jobs, focusing on youth employment and skill enhancement in a sector ripe with potential. Yet, this vision of empowerment and progress was brought to a standstill, leaving aspirations unmet and potential contributions to the nation's economy unrealized, all due to the actions and decisions attributed to the President and his associates.
Supported by a distinguished Advisory Board comprising billionaires, global entrepreneurs, and CEOs, Sagarmatha is not just fighting for compensation but for principle according to Survé. The company's legal strategy, invoking the Institution of Legal Proceedings Against Certain Organs of State Act, reflects a deeper commitment to holding state entities accountable, championing a business environment conducive to growth and success within South African borders.
The company now seeks not just financial redress but a reassertion of the principles of fairness and transparency in the face of what it perceives as a coordinated assault on its potential and integrity.