Iqbal Survé intimately involved in Ayo listing, PIC inquiry told

Businessman Iqbal Survé personally influenced the allegedly inflated valuation of Ayo Technology Solutions ahead of its listing on the JSE in 2017, the company’s chief investment officer testified on Tuesday. 

The statement and testimony provided to the inquiry into the Public Investment Corporation (PIC) by Abdul Malick Salie, who was involved in the listing of Ayo as an executive of African Equity Empowerment Investments (AEEI), directly contradicted the testimony of Survé, who controls AEEI and who has previously appeared before the commission.

The JSE recently requested external audit opinions from both Ayo and AEEI, due to evidence presented at the PIC inquiry. AEEI holds 49.36% of Ayo, according to its website.

Ayo’s former chief information officer Siphiwe Nodwele, previously testified at the inquiry that the company had exaggerated its value at the time it was seeking an investment from the PIC, and had given the market misleading information on its revenue prospects. An allegation of accounting manipulation was also put forth by Ayo’s previous CEO, Kevin Hardy, in his testimony before the commission.

Ayo has denied the allegations, saying it will comply with the JSE’s request for an audit opinion.

Salie stated on Tuesday that Survé was personally involved in the listing even though he occupied no executive or board role at the company. He said Survé’s view of the valuation was supported by the work of the AEEI corporate finance team  tasked with preparing the company for its presentation to potential investors.

Salie’s first take on the valuation of Ayo led him to an estimate of R2.3bn. Later, and based on the ability of Ayo to identify clients and customers of BT-SA, another ICT company in which AEEI was already invested, the valuation was increased to R5bn.

Salie agreed with evidence leader Jannie Lubbe’s assessment that even this very generous and optimistic figure was effectively based on a “thumbsuck”. 

Salie then described a meeting between himself, Khalid Abdulla (the CEO of AEEI) and Survé, in which the draft, pre-listing statement (PLS) was reviewed and which included plans to supplement Ayo with other Sekunjalo Group IT assets. Sekunjalo is a group controlled by Survé’s family trusts. 

“Survé was was of the view that the desired value of Ayo be set between R10bn and R15bn,” Salie testified. “At the meeting, Survé’s recommendations were incorporated in the draft PLS and a valuation of R13bn was determined.” 

Ayo would later list at R43 a share, with the PIC paying R4.3bn for a 29% stake in the company. This effectively valued Ayo at R14.8bn. The PIC was the only buyer of shares sold at the listing.

The PIC, which manages more than R2-trillion in assets on behalf of the Government Employees Pension Fund (GEPF) and other social security funds, has been embroiled in numerous controversies that include allegations of corruption against a number of its directors, prompting the entire board to resign in February.

On Tuesday, Salie also described being privy to discussions held between Survé and former PIC CEO Dan Matjila long before the listing was even made public.

“I was present on a conference call in which [Survé told Matjila] we have a roadmap for this listing and the team would come and discuss it [with the PIC] at a later stage. This took place around the end of July 2017,” says Salie.

“Was this even before the finalisation of the valuation, and before even a draft PLS statement had been produced?” asked evidence leader, Jannie Lubbe. “Yes, that is correct,” replied Salie.

Salie resigned as an executive director of Ayo in early May. Ayo said at the time that “Malick will, however, remain as an employee of Ayo in a senior management role and will continue to oversee all of the company’s investment activities.”  

Ayo said on Tuesday that Salie's statement to the commission was made “in his personal capacity and... without the knowledge or input of the company”.

It said his statement was not reviewed or reported on by Ayo's auditors and the company was not aware of the basis on which he derived his figures.   

- BusinessLIVE