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AYO puts up strong defence against PIC in Cape High Court

Published Mar 11, 2023


Cape Town - The case in which JSE-listed AYO Technology Solutions (AYO) is defending itself against claims by the Public Investment Corporation (PIC) that a subscription agreement concluded between both parties in 2017 was illegal, had a dramatic first week full of twists and turns.

The PIC, which is also the guardian of 82% of the Government Employees Pension Fund’s portfolio, wants the Western Cape High Court to set aside its subscription agreement and recover the R4.3 billion it invested in 2017 for a 29% stake in AYO when the company listed.

In a sidebar to the case, the PIC lost an interlocutory application brought by Sekunjalo Investment Holdings and 3 Laws Capital about an application for a subpoena issued to them by the PIC requesting all communications the two entities had with AYO.

Judge Ashley Binns-Ward, who is hearing the matter, listened to the arguments in the interlocutory on Tuesday and delivered his order on Thursday morning, setting aside the PIC’s application and ordering costs to be paid jointly and severally by the PIC and GEPF as first and second respondents.

There was no less drama in the main case, where cross-examination by AYO’s senior counsel, Advocate Nazeer Cassim, of the PIC’s first witness, Victor Seanie, showed that, in fact, the PIC’s portfolio management committee had approved the R4.3 billion shares for cash transaction with AYO.

At Cassim’s request, Seanie read out for the court record documents showing that PIC policies allowed for transactions of less than R10 billion to be signed by Dr Dan Matjila, and then subjected to normal PIC transaction approval processes at a later stage.

This contradicted Seanie’s oft-repeated claims, which he made again in court during his testimony and cross-examination, that the AYO deal had bypassed PIC’s due diligence processes.

During his evidence, Seanie had said that the PIC usually held two investment portfolio management committee meetings to approve new investments, but in the case of AYO no meeting took place before the investment decision was taken.

During the cross-examination, Cassim took Seanie back to a PIC disciplinary hearing against him chaired by former judge president of the Labour Appeal Court and arbitration specialist John Myburgh.

Myburgh’s findings referred to Seanie as dishonest, fraudulent, and lacking integrity.

Cassim asked Seanie whether he had agreed with the disciplinary’s findings, and when he said he hadn’t Cassim asked whether in that case he had taken the findings on review to the CCMA, where he might have challenged them.

Seanie said he had indeed approached the CCMA, but admitted to having abandoned the matter. Cassim then put it to him that this meant he had accepted the findings, but Seanie insisted this was not the case.

However, Judge Ashley Binns-ward, who is hearing the matter, pointed out that, according to Myburgh, despite Seanie having doubts about the deal, he had “played along”, a sentiment echoed by Binns-Ward who said: “My impression too.”

The drama continued on Thursday afternoon, when the second witness in the case, British Telecom SA managing director Bertrandt Delport, who was the company’s internal legal counsel in 2017, was advised by the judge to report a threatening phone call he claimed to have received about his upcoming testimony to the police.

Delport informed the court he had received a threatening phone call on Wednesday night and from a number and a person he did not know warning him to “be honest” in his evidence, otherwise…

The case continues on Monday, when it is expected that Delport will resume giving evidence.

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