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Call for probe into PIC chairman’s actions

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Plot against AYO Technology Solutions

LEGAL action is in the pipeline following revelations that the Public Investment Corporation is part of a plot against information and communications technology business AYO Technology Solutions at the behest of PIC board chairperson and deputy finance minister Mondli Gungubele.

Reliable sources have informed Independent Media that Gungubele ordered the Companies and Intellectual Property Commission (CIPC) to issue the PIC with a compliance notice in an attempt to recoup its investment in AYO.

Independent Media learned that a meeting was held on February 20 at the PIC offices, where senior PIC officials deliberately withheld information from CIPC. The information included the financial records and PLS of AYO, which showed that the tech company had a turnover of R575 million and profitability of R190 million. Instead, the PIC officials misled CIPC into believing that the AYO company filing and not the AYO group filing represented the true reflection of its revenue, profitability and good standing.

Four PIC officials and two CIPC members were at the meeting, sources have indicated. The PIC’s approach was to use CIPC and the compliance notice to issue an anti-dissipation order against AYO, freezing AYO’s bank accounts, followed by litigation, thereby placing it under pressure to return the funds the PIC had invested in AYO.

The brains behind the meeting were apparently Gungubele and board member Sibusisiwe Zulu, who was recently implicated in corruption by the PIC. 
Asked about the accuracy of the compliance notice, CIPC officials, who spoke on condition of anonymity, were stunned that the PIC did not disclose the full financials and PLS of AYO, particularly the real revenue and profitability of the group.  

CIPC officials were given the impression that AYO had a turnover of less than R12m, which was the official company filing, and not that of the group, and was therefore unprofitable. What the PIC deliberately withheld is that AYOs turnover was almost R600m. They did not disclose that AYO had profitability of R130m to R190m for each year preceding the CIPC/PIC meeting on February 20. An analyst indicated that AYO would more than likely have profitability of more than R500m in 2019 and R1.1bn in 2020, since AYO still needs to deploy the cash raised with the PIC. It was this material non-disclosure by the PIC which led to CIPC issuing the compliance notice.

Analysts have said there had been an attempt by the PIC to shift blame to the CIPC and to make it seem that the CIPC initiated and sent the compliance notice without the PIC being aware of it.

AYO chairperson, advocate Wallace Mgoqi, asked for a full commission of inquiry into the development and called on the current PIC commission of inquiry to investigate the PIC officials implicated in the collusion, including Gungubele.

“It is clear that the media campaign to discredit AYO over the last few weeks has as its main objective to create a negative public perception to allow the PIC chairman to achieve his objective of deflecting from real corruption at the PIC which involves directors, and has used AYO as a deflection tactic,” he said.
Mgoqi questioned the motive of the PIC in leaking the CIPC letter to Business Day. 

“The conduct of Mr Gungubele and some of the directors of the PIC should be investigated. We applaud those directors of the PIC who have the courage to speak to their convictions. What is happening is disgraceful and not in keeping with the tenets of the Constitution of our country,” said Mgoqi. 

AYO chief executive Howard Plaatjes said that the company intended to seek legal advice.

“AYO reserves all of its rights with this latest information. AYO is confident of its position and will defend any litigation. Recent testimony at the PIC commission of inquiry of the PIC directors confirmed that the AYO investment is above board and has met all the delegation of authority requirements,” he said.

Mgoqi called on Finance Minister Tito Mboweni and President Cyril Ramaphosa to probe the conduct of Gungubele, who had lied under oath about being fired by the finance minister and was implicated in the attempt to undermine AYO.

Attempts to get comment from Gungubele were unsuccessful.

An SMS and email was sent to PIC spokesperson Sekgoela Sekgoela, who said he would forward the query to the relevant people and respond. No response was received.

CIPC spokesperson Tshiamo Zebediela responded with a message meant for a Mr Chetty which read, “Hi Mr Chetty. I already have 22 missed calls from newspapers. Do we have feedback or should I wait for tomorrow?”