The Public Investment Corporation said in a statement on Monday it was not "collaborating" with AYO Technology Solutions in opposing a compliance notice issued by the Companies and Intellectual Property Commission against the PIC directors, directing them to recover funds invested in AYO.
Rather, it said, it was in agreement with the CIPC that losses related to the AYO investment needed to be recovered – but it did not want to breach the deadline set out in the original compliance notice.
AYO, for its part, is attempting to have the compliance notice set aside altogether.
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The state asset manager issued its statement in response to what it called "a misleading article" published by the Sunday Independent which, in its view, suggested it was "collaborating" with AYO in opposing the CIPC.
The CIPC issued the compliance notice on February 21 this year, giving the PIC 15 business days to recover the R4.3bn it invested in AYO and six months to recover any interest it may have accrued.
According to the CIPC, the PIC did not act in good faith or the best interests of the company when it decided to make the "disproportionate" investment in AYO. The investment has drawn controversy, among other reasons, over the R43 paid per share for a 29% stake when – measured by net asset value – they were valued at 15 cents per share.
The PIC brought a notice of motion in the North Gauteng High Court in Pretoria on Thursday last week, with the CIPC as the respondent. AYO is neither an applicant nor a respondent, according to the court documents seen by Fin24.
In its Monday statement, the PIC said it agreed with the CIPC that any losses relating to its AYO investment should be recovered.
The only reason for the notice of motion, set to be heard on Tuesday, is that it does not want to breach the deadline in the CIPC's compliance notice, the PIC said.
According to the state asset manager, the CIPC agreed that the deadline of 14 March would not leave sufficient time to undertake the necessary legal steps to recover losses relating to the AYO transaction.
According to the PIC, when the CIPC issued its Compliance notice in February this year, the PIC and its legal team were already working on the recovery process – and they are still engaged in it.
The compliance notice was issued "on the basis of inaccurate information at the disposal of the CIPC", especially about the role of the PIC board in relation to the AYO transaction, the asset manager added.
AYO issued a notice to shareholders on Monday, stating that it brought an urgent application in the North Gauteng High Court in Pretoria on Thursday 7 March to interdict the CIPC from enforcing the notice issued to the PIC's board in February and to interdict the PIC from acting on the notice.
According to AYO, it applied to the court to have the notice issued by CIPC set aside.
"AYO maintains that the uptake by the PIC of its listed shares through a private placement in December 2017 was fully transparent and complied with all the necessary legal requirements and will defend any action which seeks to undermine AYO's contractual rights," AYO said in its statement.
The PIC said it did not support the AYO application and was not collaborating with AYO "in any shape or form".
"Any suggestion to the contrary is mischievous and uncalled for. The PIC reserves its rights in this regard," the PIC statement concluded.* In July last year, then finance minister Nhlanhla Nene told Parliament that the PIC had begun working on an exit strategy to withdraw its investment in a 25% stake in Independent News and Media. It is not clear what progress has been made in this regard to date. Dr Iqbal Survé is the executive chair of Independent Media. Survé is also a shareholder in AYO through the African Equity Empowerment Investments.