What does Ayo have to hide?

Companies are required to be transparent and accountable.
From one extreme to the other – Ayo’s then CEO Kevin Hardy used a vuvuzela to amplify the noise around the company when it listed on the JSE in December 2017. Picture: Moneyweb

Moneyweb recently requested access to the Ayo Technology Solutions share register in terms of Section 26 of the Companies Act. This was done within the prescribed manner and following due process. Ayo did not respond to this application. This begs the question, what does Ayo have to hide?

Ayo has made a number of large share issues over the last few years. However, the only large shareholdings evident in its publicly available share register are those of African Equity Empowerment Investments (AEEI), part of Iqbal Survé’s Sekunjalo Group, and the Public Investment Corporation (PIC). There are also a few anomalies the shareholder register may clear up.

1. Share issue of 10.23 million shares at R1.50 per share in 2016/17

The Ayo pre-listing statement states that on September 1 2016 Ayo issued 6 854 000 shares at R1.50 per share in terms of the Puleng Acquisition Agreement, and on October 1 2016 Ayo issued 6 854 000 shares at R1.50 per share in terms of the Headset Solutions Acquisition Agreement.

However, Ayo’s financial statements to the end of August 2017 state that the number of issued shares amounted to 10 230 579, and they were issued at R1.495614 per share.

There were some rounding differences, but essentially, share premium was increased by R15.262 million.

Cross-referencing this to the AEEI annual financial statements as at August 31 2018, there is a further discrepancy. Note 6 of the statements states: “As part of the consideration for the purchase of Kalula Communications (Pty) Ltd t/a Headset Solutions [by AEEI] the sellers obtained 6.5 million ordinary shares in Ayo on September 1 2016. Additionally, as a contingent acquisition consideration paid to the sellers of Puleng Technologies (Pty) Ltd, the Group [AEEI] would issue 3.6 million ordinary shares in Ayo on October 1 2016.”

Who were these shares issued to? The shareholder register should answer this question.

2. Share issue of 31.96 million shares at R1.50 per share in 2017/18

According to the Ayo circular to shareholders dated December 1 2017, 31 960 000 shares would be issued to a B-BBEE consortium at R1.50 per share, amounting to R47 940 000.

The consortium comprised “various broad-based empowerment consortiums benefitting, inter alia”: the Police and Prisons Civil Rights Union (Popcru), the Southern African Clothing and Textile Workers Union (Sactwu), the Black Business Council, Federation of Unions of South Africa (Fedusa) nominees, the National Education, Health and Allied Workers’ Union (Nehawu) and the Social Entrepreneurship Foundation – “provided that no member of the consortium would be a related party as such term is defined in the JSE Listing Requirements”.

Were special trusts established to accept and hold these shares on behalf of the various consortiums, or were these shares issued to individuals? Who were the individuals who were issued with the shares? These questions will also be answered by the shareholder register.

3. Private placement share issue of 99 782 655 shares for between R2.7 billion and R4.3 billion

It is interesting that the circular to shareholders includes the issue of shares at R1.50 and the intention to issue shares for the maximum amount of R4.3 billion within the same period.

The PIC would have had sight of the circular to shareholders before taking up the private placement for R4 290 654 000 in January 2019.

Section 26 of the Companies Act

Can Ayo withhold access to its share register?

The Act has made great strides in requiring companies to be more transparent and accountable, and to display a higher level of integrity.

Section 26 of the Act provides for access to a company’s records as follows:

  • A person who holds any beneficial interest in any of its securities (member) has a right to inspect and copy various company documents without any charge, including the company’s Memorandum of Incorporation, the records in respect of the company’s directors, the reports to annual meetings, the annual financial statements, and the share register.
  • A non-member has the right to inspect or copy the share register on payment of the prescribed fee for such inspection.
  • The register of members and register of directors of a company must be open to inspection by any member, free of charge, and by any other person upon payment for each inspection of an amount not more than R100.
  • When a request to access the company register is made in the prescribed manner, the company has 14 days to comply with the request.

Supreme Court of Appeal 

Moneyweb has been a party to one of the most precedent-setting cases related to Section 26 of the Act. It relates to Moneyweb’s application to access the shareholder register of the Nova Property Group, where the Supreme Court of Appeal (SCA) clarified that the media and members of the public have an unqualified right to obtain access to share registers.

Ayo therefore has no defence for not allowing Moneyweb to inspect the shareholder register.

What now?

Moneyweb will not approach the Companies and Intellectual Property Commission (CIPC) to issue Ayo with a Compliance Note compelling it to provide access to its share register. We will report this contravention of the Companies Act to the JSE.

* Moneyweb requested access to the Ayo share register four weeks ago, submitting a Request for Access to Company Information (CoR 24) form to the company on February 12. Ayo did not respond.

On further request this week, Ayo informed Moneyweb that its share register is publicly available.

Moneyweb remains of the view that the publicly available share register only contains shareholder information relating to the dematerialised shares, and does not contain the names of all shareholders.

Read: The CIPC opens with an aggressive gambit



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All is not well. The PIC has bought a lemon, but the question is why, and why did they pay R 43.00 per share. It stinks.

The PIC Directors and Managers need to be held accountable in their personal capacity; who should be doing this?

Let’s let them know our displeasure and complain to the relevant Authority.

Our taxes cannot be wasted like this!

“All is not well” – understatement of the year.

If Icky Bollocks Shifty has any hand in any transaction, crime is involved. Fact.

Could you not use the the shareholder information per the Integrated Report as at 31 August 2018? This is on their website.

Go, Barbara!

Great to see a journalist to a million times more than all fund managers combined. Well done Barbara-you DID something here. Most fund managers simply look away if there is a problem( eg Naspers unethical controlling structure etc)

How many instos invested in Ayo? Zero. That is their job, to allocate capital (or not in this instance). It is not their job to bring concerning issues to public attention, for taht we have journalists.

If anything too many fund managers tend to forget taht distinction and just love to see themselves in print pontificating on everything under the sun – Magda for one springs to mind.

Put me down for R4.3bn worth of shares at R43.50 a share please.

Ag, cut them some slack. For all we know, with the impending demise of The New Age, some astute analyst could have speculated that AYO could become a major beneficiary of government R600million annual advertising spend, what with their balanced reporting style and all that. Suddenly a valuation of R4.3 billion at a share price of R43.50 begins to sound justifiable, especially to the BEE consortia that invested at R1.50 per share.

You can only value on demonstrable income not future corruption monies to come.

What is very disturbing is that the PIC had to sell Anglo shares to fund this transaction.

It would appear that there is hardly a member of the BBEEE cartel elites who is not involved in some form of corruption in some way with public funds or the tax base as a source.

Down the line, we see the consequences every day in service delivery riots, failing infrastructure and social collapse in poor families of every race.

The only real solution is voting the ANC out of power. Soon.

This is so obviously a Ponzi scheme, any first year accounting student should be able to pick up that (i) 93% of the assets of this business are the cash from the PIC capital raise(ii) NAV was 15cps before PIC cash injection – for what on earth was the PIC paying 99c in the R goodwill?

That this company is still listed and that Surve clown is not behind bars is a crime in itself

End of comments.





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