AYO Technology Solutions (AYO) has been cleared of wrongdoings in its investment deal with the Public Investment Corporation (PIC).
Instead, retired Judge Willem Heath found that the Mpati Commission had failed to conduct a proper investigation before concluding on the matter.
Judge Heath, who is also the former head of the Special Investigating Unit (SIU), also found that the PIC, Africa’s largest asset manager, was biased against AYO in seeking to recover its lost investments.
Heath this week released his review report of the proceedings and findings of the PIC Commission of Inquiry, which was privately commissioned by Sekunjalo Investment Holdings (SIH) and some of the companies associated with Sekunjalo, after the outcome of the PIC Commission of Inquiry into allegations of impropriety at the state asset manager.
The Mpati Commission’s report, according to the Heath review report, had unfairly tainted SIH, it’s executive chairman Dr Iqbal Survé, and associated companies, including JSE-listed AYO.
Heath, in his report, exonerated AYO, and Sekunjalo, and pulled no punches in rebuking Mpati’s investigation and outcome, punching holes in the report. When analysing the Mpati Commission’s report, Heath found many discrepancies and has concluded that it is reviewable.
The Mpati Commission had concluded that AYO’s share price was manipulated during the listing period. Heath said the testimony of the PIC officials “explicitly rebuts this conclusion.”
“Taking each of these statements into account, I find it difficult to see how, objectively, the PIC Commission could arrive at the conclusion that the AYO share price was outrightly manipulated,” said Heath in his report, referring to testimony given by the PIC officials at the Mpati Commission.
Heath further concluded that the Commission had acted unfairly against Survé, as by being among the first persons to testify before the commission, he was not given a chance to confirm, rebut and/or clarify the testimony of other former AYO and PIC executives.
“Many provided conflicting views and opinions and made allegations, which Dr Survé could have responded to had the Commission re-called him again,” said Heath.
He also found that the Mpati Commission’s report and findings lacked facts that are based on verified evidence.
Heath noted that while the PIC had lost about R200 billion in a multitude of investments “most of which were not investigated by the Mpati Commission,” it had only targeted AYO to recover the money.
“According to our records, the PIC has not instituted any legal action for recovery of investments in other listed companies other than AYO.”
Heath has recommended Sekunjalo lay a complaint with Finance Minister, Enoch Godongwana, about the PIC only seeking to recover its lost investment/loan from AYO and no other PIC invested company.
“It should be noted that the PIC instituted its claim against AYO before the Mpati Commission started and this point was raised by the Mpati Commission itself. In other words, the PIC did not wait to hear the evidence of AYO/Sekunjalo and instead elected to institute litigation,” he said.
Critically, Heath has also determined in his findings, that the Mpati Commission erroneously interpreted its term of references (ToR), “which results in a reviewable irregularity that could lead to it (the report) being set aside.”
He also said: “The PIC’s investment in AYO was supported by PIC senior executives, as well as its investment committee and subsequently by its board and its investment committee. To the extent that there was any non-compliance by the PIC with its internal processes in relation to this transaction, no evidence exists that such non-compliance is attributable to AYO.”
Heath likewise found that the report had caused significant damage to the reputation and goodwill of Sekunjalo and threatened its existence.
“It also imperils the livelihoods of thousands of employees and sets back an important transformation project(s). All of this is regrettable due to the MC (Mpati) not following due process and natural justice,” he said.
“The Mpati Commission blatantly ignored its own affidavits and testimonies presented by witnesses to the commission,” concluded Heath.