South Africa


Former Ayo board member implicates Iqbal Survé directly in bogus valuation of company

Iqbal Survé at the Sandton Convention Centre on July 25, 2018 in Sandton, South Africa. (Photo by Gallo Images/Wessel Oosthuizen)

The commission of inquiry into allegations of impropriety at the Public Investment Corporation is unpacking how the PIC came to invest R4.3-billion in Iqbal Survé’s Ayo Technology Solutions in 2017. On Tuesday 14 May 2019, a former Ayo board member dropped Survé in it personally — by alleging that he was intimately involved in the process of artificially inflating Ayo’s valuation.

When the PIC invested R4.3-billion of public servants’ money in Iqbal Survé’s IT company, Ayo Technology, in 2017, it was on the back of the company being valued at a whopping R14.8-billion.

The PIC inquiry has already heard that this valuation was absurdly inflated, with the company share price since plummeting from R43 a share to just under R11 a share.

Now testimony before the PIC inquiry suggests that Survé himself was not only aware of the number-fiddling that went into the bogus valuation, but was allegedly directly involved in instructing employees to manipulate the figures.

Testifying on the second day of the commission’s resumption after a fortnight’s break, former Ayo board member Malick Salie told the inquiry that the numbers involved in the valuation were “not real”.

Salie said that Survé had been insistent that the valuation of Ayo should fall between the R10-billion to R15-billion range.

In Survé’s view, said Salie, “based on all the plans and the vision for Ayo, anything below R10-billion is unacceptable”.

This was despite the fact that the verifiable numbers involved would not in reality amount to much above R2.3-billion, Salie said. This could be stretched to R5-billion based on estimates involving clients of British Telecoms South Africa (BT-SA), which Ayo was planning to target.

Evidence leader advocate Jannie Lubbe suggested, however, that even this R5-billion figure was a “thumbsuck”.

Salie agreed.

But the R5-billion valuation was deemed unsatisfactory by Survé, who pushed for the valuation to be increased to R13-billion and ultimately to R14.8-billion.

Lubbe told the inquiry that Salie’s testimony directly contradicted that of Survé, who had previously told the commissioners that he was not involved in either the preparation for the listing of Ayo on the Johannesburg Stock Exchange (JSE), or the valuation of the company.

Salie was emphatic, however, that Survé had been closely involved.

The alleged funny business around Ayo’s JSE listing in December 2017 did not stop with its valuation.

Lubbe said that he possessed evidence to the effect that Survé and former PIC CEO Dan Matjila had a “discussion” around Ayo, its valuation, its listing and potential PIC investment, well before Ayo’s listing was made public.

Salie confirmed that a conference call had taken place between “Dr Dan” and Survé some months in advance of the listing with the aim of “sort of getting [the PIC] ready”.

Lubbe clarified: “Even before there was any finalisation of [Ayo’s] valuation […] Dr Survé was in discussion with Dr Matjila from the PIC?”

I think that is correct,” Salie responded.

When Ayo’s listing went public, the PIC was the only external party to invest in the technology company — receiving only a 29% stake in exchange for a hefty R4.3-billion investment. Even at the time, eyebrows were raised over the PIC’s appetite for such expensive shares.

Salie’s testimony that Survé and Matjila may have colluded ahead of time on the PIC’s Ayo deal again contradicts Survé’s previous testimony to the inquiry.

In April 2019, Survé told the commission that the sole negotiations which took place were between Ayo’s board and the PIC’s asset managers, and did not involve him and Matjila.

Three months earlier, however, the inquiry had heard from PIC assistant portfolio manager Victor Seanie how Matjila was insistent in driving through the PIC investment in Ayo within an inadequate timeframe, despite objections from Seanie and his colleague that the price they were paying was excessive.

Survé has been adamant that the valuation of Ayo was sound and that there is no reason for the PIC to seek to recoup its investment in the technology company. He has also accused PIC chair Mondli Gungubele of aiming to “crush” Ayo.

Although the PIC commission has been on a two-week break over the election period, Survé is never far from the headlines.

The businessman’s very public last-minute donation of R1-million to the ANC in the Western Cape on the eve of elections devolved into humiliation for both parties after the ANC announced its intention to return Survé’s donation after initially having accepted it.

Survé has since claimed that the ANC did not actually return the money because it had already been spent — and once again accused his nemesis Gungubele of a political vendetta. DM


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