Cape Town - The Public Investment Corporation’s (PIC’s) own witnesses appeared to differ sharply in their categorisation of the asset manager’s investment in ICT group AYO Technology Solutions (AYO) on Thursday, as testimony in the PIC v AYO case in the Western Cape High Court continues.
While the PIC’s general manager of listed equities, Lebogang Molebatsi, told the court earlier this week that he believed that the AYO transaction was a good deal, a forensic professor and expert witness called by the PIC, Harvey Wainer, appeared to contradict him on Thursday, saying it was “not a good deal”.
The deal in question is the 29% stake in AYO that the PIC subscribed in in a private placement ahead of the ICT group listing on the JSE in December 2017, with the PIC now attempting to recover its R4.3 billion investment.
On Wednesday, Molebatsi told the court that he believed the pre-listing statement (PLS) showed that the deal would be a good investment.
However, in his testimony, and under cross-examination by AYO’s senior counsel, Nazeer Cassim, Wainer criticised the PLS, saying the forecasted values and the “dynamics do not make sense”.
He explained to the court that his mandate, as given to him by the PIC in relation to this case, was to consider revenue and growth and consider if the valuations were probable and realistic.
The outcome of his deliberation based on his mandate was that the PLS “was a wholly unrealistic forecast”.
Wainer also confirmed that in a pre-hearing discussion between himself and AYO’s expert witness on the matter, André Pieterse, he had not discussed the question of mandates, whose own mandate in this hearing appears to be completely different.
“I responded to the mandate,” said Wainer when asked by senior counsel what he had reviewed.
Cassim further tackled Wainer on the details of the PLS, in which attracting new business to AYO after listing on the JSE was factored into the forecasts, and whether Wainer had accounted for AYO’s potential with its BEE credentials to fill what was then a gap in the market, as the PIC had done in their deliberations.
The matter will resume next Thursday.
Cape Times