JOHANNESBURG - AYO Technologies says it is engaged in a legal dispute with petrochemical giant Sasol over the proper interpretation of an early-termination provision in a dispute declared after Sasol jumped the gun and ignored arbitration processes.
In a SENS announcement yesterday following Sasol’s media statement that it had terminated the ICT Master Services Agreement with AYO, the company said it would clarify some matters that had not been put in the public domain with the termination announcement.
The group had undertaken last year to inform its shareholders in its reviewed results for the year ended August 31, 2019, released on SENS on December 20, that a significant customer gave AYO six months’ notice, purporting to terminate the agreement, and AYO had disputed the right to cancel and had invoked arbitration provisions under the agreement.
AYO said the contractual provision provides for an internal mechanism for resolving the dispute, failing which the dispute must go to arbitration.
“AYO committed itself to this process. However, on December 13, 2019, Sasol issued urgent proceedings out of the Western Cape High Court, seeking certain interim relief against AYO, pending the arbitration. AYO opposes the High Court application on procedural and substantive grounds,” it said.
The company pointed out that, notwithstanding the dispute, AYO continues to render ICT services to Sasol pending the finalisation of the arbitration and High Court proceedings.
Investigative journalism team Amabhungane alleged yesterday that clinching the Sasol deal was ostensibly the reason that the listing of AYO had to be rushed through in December 2017 - causing the Public Investment Corporation (PIC) to upend its usual due process to invest R4.3billion for overvalued shares, now worth only R131million at Monday’s share price.
They also alleged that when AYO listed, it had two major plans on the horizon. It was going to spend R1bn of the PIC’s money buying a 30 percent share in British Telecoms South Africa from its own parent company, the Survé-controlled African Equity Empowerment Investments.
AYO said yesterday that notwithstanding the legal dispute, it was committed to a consensual solution.
“AYO is committed to finding a mutually acceptable solution with Sasol to the matter. The outcome of the legal proceedings will be communicated in due course,” it informed shareholders.