LISTEN | Iqbal Survé hid key info from PIC in Ayo deal
Secret tape reveals how media boss urged CEO to mislead
An explosive secret recording has revealed how media owner and businessman Iqbal Survé colluded to withhold key information from the Public Investment Corporation (PIC) that led to the fund manager controversially investing R4.3bn of government pension money in one of his companies.
In the recording, Survé can be heard plotting with board members of Ayo Technology Solutions, an IT company in which he has a significant stake. They discuss withholding from the PIC information about a crucial transaction they promised in the deal that would now be off the table.
On Friday, the directors of the PIC asked finance minister Tito Mboweni to relieve them from the board.
Among the accusations levelled at the board and senior PIC executives are serious irregularities in the process leading up to the PIC acquiring a stake in Ayo Technology Solutions, of which Survé's Sekunjalo Investment Holding is a significant shareholder.
It has emerged that the PIC, which manages R2-trillion in assets, was misled into believing that its huge investment in Ayo Technology Solutions would allow Ayo to acquire a 30% stake in British Telecoms SA, a local subsidiary of the global telecoms giant, for R1bn.
Together with other board members, Survé can be heard clearly admitting that he withheld critical information from the PIC, trying to force the company's then CEO, Kevin Hardy, to lie to the PIC.
Survé wanted Hardy to tell the PIC that the BT deal was still on the table, even though Ayo had already written to BT to inform them that the deal was off. They also withheld from the PIC concerns raised by BT's parent company over the transaction with Ayo.
Hardy repeatedly expresses his discomfort about having to lie to the PIC. In the end Hardy agrees to call the PIC after Survé instructs him and another to make the call. They are told not to say that Survé was in the room.
The Ayo board meeting was held in Cape Town in August. The Sunday Times has a copy of the recording.
LISTEN | How the PIC was misled over multi-billion investment in Ayo
Controversy has followed the PIC's investment in Ayo. It paid R4.3bn for a 29% stake at R43 per share when the company's real value at the time was said to be hovering around 15c a share.
In the recording, Survé reveals the extent of the PIC's anger after the fund manager found out via a notification put out by the Johannesburg Securities Exchange that Ayo was no longer bringing the British Telecoms SA stake on board.
This was because the stake was held by another of Survé's companies, African Equity Empowerment Investments, but BT's parent company refused to sell the stake.
Survé tells board members how he had to field angry calls from former PIC chief executive Dan Matjila and suspended head of listed investments Fidelis Madavo after they found out that the deal was off.
"Firstly, they said: 'Who gave you guys permission to stop the BT transaction?' They want to do that transaction, it was a critical to them, it was one of the reasons why they invested. They are having the investment committee meeting tomorrow morning. I've literally been listening to him [Madavo] screaming at me," Survé tells the board.
Ayo Technology chair Salim Young, former Ayo chief technology officer Siphiwe Nodwele and Naahied Gamieldien, who was the company's chief financial officer, are also heard speaking in the recording.
In the recording, Survé advises the other board members on how to respond to the PIC.
"I think it's important that somebody gets on the phone with them [PIC] and says to them: Look, this is delayed, this is not happening right now. Negative media pressure has made it difficult for BT, for us, the whole market," he says.
Hardy also expresses grave reservations about the deal. "We've got ourselves into a real corner with BT because we had no other option but to put something, as we discussed, something tangible on the table. They would never OK that acquisition because of all the issues that have been created in their mind about what they are trying to protect themselves from," Hardy says.
Yesterday Survé admitted to having addressed the Ayo board over the PIC's concerns, but said it was only to clear the confusion around whether the BT deal was still happening or not.
He claimed he was forced to call the PIC and seek clarity after Hardy and Nodwele lied to Ayo and the AEEI that there was reluctance on the part of the PIC to support Ayo's acquisition of a 30% stake in BTSA because there was a feeling that it was worth way less than the R1bn figure that was being proposed.
"I said the PIC was upset at the time that there was even a suggestion they did not want to do it [the BT deal]. I remember subsequently castigating Kevin Hardy for conveying the wrong impression that the PIC did not want to do this transaction," Survé told the Sunday Times, after initially denying he had attended the board meeting.
He vehemently denied there had been a deliberate plan to mislead the PIC, claiming the BTSA transaction was only frustrated by negative media coverage in SA.
"There was a lot of negative media, really unnecessary, around the Ayo transaction. You can imagine if you are BT, of course you would be concerned. If you are PIC, you would be concerned. If you are any other shareholder you'd be concerned because any negative media around any company creates concern."
Elena Papayorgioglu, BT's corporate affairs manager for Africa, Asia and the Middle East, told the Sunday Times the company supported SA's broad-based black economic empowerment drive, but all deals it was involved in needed to be ethical and comply with high governance standards.
"These transactions must also satisfy the highest levels of governance in order to inspire public trust," said Papayorgioglu.
The PIC declined to comment, saying its investment in Ayo was subject to an investigation by the commission. Ayo did not respond.