The high court in Johannesburg has ruled that Ayo Technology Solutions’ bid to overturn First National Bank’s decision last month to close the JSE-listed technology group’s banking facilities will not be heard on an urgent basis.
This is according to a report by Business Live (paywall), which said the decision could now imperil the Iqbal Surve-linked technology group, which faces having its bank accounts closed on 3 May.
FNB’s decision to terminate Ayo’s banking facilities follows a similar decision last year by Absa. FNB has declined to provide any reasons for its decision, citing client confidentiality when contacted for comment by TechCentral earlier this month.
According to Business Live, which quoted Ayo’s legal counsel, Nazeer Cassim, the group has failed so far in opening accounts with other lenders and as a result could face liquidation.
“Despite the company’s best efforts, FNB has not provided Ayo with what it regards as valid reasons for termination,” Ayo said in a statement to shareholders on 15 April. It said it was “reviewing its options” for an alternative transactional banking facility.
The Public Investment Corp, which manages and invests civil servants’ pension money, controversially subscribed for a 29% stake in Ayo before its listing on the JSE, paying R4.3-billion for stake. On Tuesday, Ayo’s total market value was R2.6-billion. The share is, however, very thinly traded.
Earlier in April, amaBhungane reported that Absa last year sent letters to companies directly or indirectly controlled by Iqbal Survé’s Sekunjalo Investment Holdings, giving 60 days’ notice of termination of services. Companies affected included Ayo, African Equity Empowerment Investments and Premier Fishing.
AmaBhungane reported that in subsequent court proceedings late last year, Absa insisted that the bank’s “continued association with customers in the Sekunjalo Group posed intolerable reputational, commercial, and legal risks”. — (c )2021 NewsCentral Media
Duncan McLeod is Editor of TechCentral, on which this article was first published here.