Home News Order for PIC to recoup R4.3bn set aside

Order for PIC to recoup R4.3bn set aside

86
SHARE

“In my view, it follows that the issuing of the compliance is a nullity and stands to be set aside.”

File image

AN UNPRECEDENTED move by the Companies and Intellectual Property Commission (CIPC) to force the Public Investment Corporation (PIC) to recoup its
R4.3 billion investment in AYO Technology Solutions was procedurally unfair and unlawful, a court has found.

In the North Gauteng High Court yesterday, Judge Cornelius van der Westhuizen granted a ruling in favour of the PIC and dismissed the counter application by CIPC with costs.

On February 21, CIPC had issued a compliance notice compelling the PIC to recover the money from AYO within 15 days.

The notice was challenged in court by the PIC and AYO, in separate applications.

In respect of AYO’s application, which had sought to challenge the compliance notice on different grounds, the judge said it was rendered moot because judgment had been granted in favour of the PIC in its application.

It was accordingly removed from the roll.

In his judgment, Judge Van der Westhuizen said it was common cause that no fair hearing had been afforded to the PIC in respect of the possibility of issuing a compliance notice.

He added that at no stage did the PIC agree to the decision or the issuing of the compliance notice.

He said CIPC had conceded to this in oral argument during court proceedings and the CIPC was obliged to afford the PIC a fair hearing prior to issuing the compliance notice.

“In my view, it follows that the issuing of the compliance is a nullity and stands to be set aside.”

The judge was also of the view that CIPC’s counter application to have the compliance notice reviewed or modified could not be upheld because no valid notice had been issued.

Commenting on the judgment, Deon Botha, the head of corporate affairs at the PIC, said they welcomed the decision granted in its favour.

“The court acknowledged that most of the issues that PIC raised against CIPC were conceded by CIPC and these issues included absence of a fair procedure; irrational decision taken by CIPC; and the existence of material factual errors in CIPC’s notice,” said Botha.

He added that the only issue in dispute was whether the issued compliance notice was defective and stood to be set aside, or whether it ought to be suspended pending a review of that notice in the normal course.

“In that regard, the court made an important finding that CIPC failed to afford the PIC a constitutional right to be heard prior to issuing the notice. This rendered the notice invalid and null and void.”

He added that the PIC remained committed to carry out to conclusion the steps that it had already taken to recover the invested funds without any delay.

Howard Plaatjes, the chief executive of AYO Technology Solutions, said they welcomed the outcome of both court cases.

“AYO is pleased with the outcome. The company once again re-asserts that the investment the PIC made into the holding group during the listing remains sound. AYO has made significant strides forward with an established solid base, along with a number of good acquisitions and investments,” he said.

CIPC did not respond to emails or calls for comment.

– Ayanda Mdluli