The ongoing battle between Ayo Technology Solutions (AYO) and the Public Investment Corporation (PIC) has once again come to the fore, and in the process, highlights some of the shortcomings of our hard-fought and won democracy and reinforces that discrimination is still prevalent in our society today.
Take, for example, how black-owned and managed AYO has been dealt with in comparison to other companies flagged at the Mpati Commission of Inquiry and those companies that the PIC have invested in who have been found guilty of fraud and corruption - yet no obvious and public repercussions, prosecution or persecution unlike AYO, whose only apparent crime is to be associated to black empowerment organisation, Sekunjalo.
The question of whether the Mpati Commission of Inquiry was used by the PIC to deflect attention from itself and its failed investments by focusing its efforts, that of the Inquiry, and the media on AYO, is not for debate here. I suspect there will be divided opinion.
Suffice to say that the aggressive media onslaught on AYO that has turned, by all accounts, fiction into fact is something we have not witnessed in this country before. At the root of this is, according to AYO’s other major shareholder (the PIC itself being a significant investor in the Group), a thinly veiled attack on the holding company – Sekunjalo Investment Holdings (SIH/Sekunjalo) - and its head, Dr Iqbal Survé.
But, if we look at the facts, we see an ICT company, ideally positioned to take advantage of South Africa’s newly minted ICT charter regarding BEE in early 2017, make an alliance with British Telecommunication Services SA (BTSA), all with the aim of listing and taking some 5-8% of the growing technology market in South Africa.
Sounds like a good investment, right, and with the competitive advantages of this construct clear and all parties involved strong, the deal was struck.
Since listing, however, AYO has been challenged at every juncture to fulfil its pre-listing-statement (PLS) mandate. Yet despite what is an apparent uphill battle due to interventions and outright mistruths, the Group has still managed to pay its investors, including the PIC, dividends. In the case of the PIC, these amount to around R400 million.
Not quite a 10% return, but as close as dammit and really not bad, given the prevailing economic climate and considering the devastation of the last few years thanks to Covid-19.
Another fact often lost on the public is that AYO was not a newly created vehicle. It was – in fact – a grouping of already existing and profitable companies that were bundled together to form a concentrated ICT Group.
Given where we are technology-wise these days, it was an absolutely smart move back then – at least to my mind.
However, I digress. Discrimination is the subject at hand, so let’s look at some examples.
Let’s start by looking at how the PIC, South Africa’s largest asset manager, has conducted itself in the face of the demise of entities such as Tongaat Hullet, Steinhoff, Lancaster and EOH, the latter whose executives have even admitted to “loaning” an ANC minister R1 million for the purposes of leisure whilst in Cape Town.
Lancaster saw R9.3 billion disappear completely off the books, while Steinhoff flushed multiple billions’ worth of pensioners' and public servants' money down the drain through the PIC’s management of their assets held in this basket, in one of the biggest corporate fraud scandals that the world has ever seen.
For those of us living in KwaZulu-Natal, perhaps the most heart-wrenching is that of Tongaat Hullet, a company once loved, revered, and protected by the communities it served.
In 2022, seven former Tongaat Hulett (THL) senior executives were charged over their role in a R3.5 billion fraud perpetrated at the company. These executives appeared in the Durban commercial crimes court in April.
The accused were: Peter Staude, Murray Munro, Michael Deighton, Rory Wilkinson, Kamasagrie Singh, and Samantha Shukla, as well as Deloitte auditor Gavin Kruger.
According to reports: “It is alleged that between March 2015 and September 2018, the accused acted in common purpose to misrepresent to THL, its employees, creditors, shareholders and more, that the revenue that was derived from land sales was the correct value, and correctly reflected in the financial reports when, in fact, they had backdated sale agreements.”
This allegedly resulted in the accounts being misstated, incorrect profits being declared, and huge bonuses being awarded.
In addition to the fraud charges, the seven also face charges of contravening the Financial Markets Act, the Companies Act and Prevention of Organised Crime Act (Poca), while Kruger has the dubious honour of being the first auditor ever to be charged under the Auditing Profession Act.
Tongaat-Hulett has a primary listing on the JSE with a secondary one on the London Stock Exchange.
What their executives are accused of doing to the people of KwaZulu-Natal and their investors is essentially an alleged act of betrayal. It is simply unforgivable and an indictment of the level of greed that has come to characterise corporate South Africa. Instead of working with the people to achieve a common purpose, corporate SA, along with the PIC under this current administration, in its bid to oust AYO, have chosen to sow divisions and put the livelihoods of thousands of families at risk.
For the record, it should be noted that AYO has never been tried or found guilty of any form of corruption or criminal misconduct.
South Africans and all associated entities should be working towards the same common purpose: to make South Africa a peaceful, prosperous, and ultimately equal society.
There should be no war – whether of words or weapons - between factions, coalitions, presidential candidates, or those with whom we differ in terms of ideas. The only war we need is one that challenges and eradicates poverty, landlessness, unemployment, crime, and economic exclusion.
Killing off black-owned and led organisations that have shown true potential (imagine if AYO had been left alone and the BTSA deal had gone through as anticipated) is not the answer to peace in our country. It is the harbinger of war.
Despite our failures as a country, there is still so much to go around for everyone. The problem is that there are those who want to horde it all for themselves. Those are the real thugs and enemies, but instead of us working together, they have us fighting each other like cats and dogs.
It’s time to work together.
Ayanda Mdluli is the editor of the Daily News.
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