AYO Response to article in Business Day
Shareholders are referred to the article published in the BusinessDay on 26 February 2019 referring to the compliance notice issued by the Companies and Intellectual Property Commission (CIPC) requiring that the Public Investment Corporation (?PIC?) recoup its investment in AYO. AYO has not had sight of such compliance notice.
AYO will formally respond via SENS to shareholders this morning, but believes the grounds for such recoupment have no merit and are baseless.
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Update:
AYO Further Response to Article in Business Day
Shareholders are referred to the article (Article) published in the Business Day on 26 February 2019 referring to a compliance notice (Notice) issued by the Companies and Intellectual Property Commission (CIPC) requiring that the Public Investment Corporation (?PIC?) recoup its investment in AYO.
AYO would like to reiterate to shareholders that it believes the grounds for such recoupment have no merit and are baseless for the following reasons:
1. The process followed by CIPC was procedurally incorrect CIPC falls within the ambit of the Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000) which gives effect to the right to administrative justice. Therefore, both the PIC and AYO should have been consulted and had sight of the Notice.
It is concerning therefore that a newspaper was informed of the Notice prior to both parties concerned having at least, at the very minimum, received a copy of such compliance notice. AYO believes that such action on the part of CIPC to be highly regrettable, if not irresponsible.
AYO further believes that CIPC, by failing to inform and provide it with a copy of the Notice to PIC, has acted contrary to the provisions of the Promotion of Administrative Justice Act.
AYO notes that the decision by CIPC is unprecedented and would like to categorically state that it did not, and has not, received a copy of the Notice.
2. CIPC has based its decision on incorrect information
Based solely on the information contained in the Article, it would appear CIPC has reached a conclusion to issue the Notice based on incorrect information.
It is stated in the Article that, according to the records of CIPC, AYO has never generated turnover of more than R12 million.
Shareholders are referred to the audited financial statements of AYO for the 12 months ended 31 August 2018 and are advised that AYO generated revenue in excess of R638 million for such financial year.
It still needs to be determined why CIPC believes AYO’s revenue to have never exceeded R12 million, but needless to say, this is incorrect.
CIPC is confusing company turnover with Group consolidated revenue and profitability.
3. CIPC determination of the value of AYO
The Article refers to CIPC stating that the key issue was the high valuation the PIC placed on AYO?s shares at listing and that this did not ‘square’ with its own information which shows a company with revenue never exceeding R12 million.
As disclosed above, besides CIPC having incorrect information about AYO, it seems they have undertaken a valuation of AYO to determine if the investment by the PIC was sound or not.
AYO questions whether the CIPC mandate allows for it to undertake a valuation, compare it to the valuation of another company (in this case the PIC) and based on the discrepancy between such valuations, issue a compliance notice.
For the record, AYO stands by its valuation, is implementing its strategy in line with its pre-listing statement and questions the jurisdiction competence of CIPC to make determinations on valuations.
4. AYO was never contacted to provide input AYO was not consulted at any time prior to the issuance of the Notice, meaning the decision by CIPC was, in addition to being based on incorrect information, potentially biased and influenced by a disinformation campaign by media houses and individual journalists.
AYO re-asserts that the investment the PIC made into the holding group during the listing, remains sound. AYO has made significant strides forward with an established and solid base, and a number of sound acquisitions and investments.
AYO regrets CIPC?s action and advise that it is ready to engage with CIPC on the matter.
Cape Town
Statement issued by AYO through SENS, 26 February 2019
