NATIONAL NEWS - The Johannesburg Stock Exchange (JSE) says it had enough time to look at all the facts when it made its pre-listing assessment of the Iqbal Survé-linked companies Ayo Technology Solutions and Sagarmatha Technologies.
The companies’ interactions with the Public Investment Corporation (PIC) are currently under scrutiny by the judicial commission of inquiry into the PIC, particularly with regards to whether or not they misled investors and were overvalued.
General manager for issuer regulation at the JSE Andries Visser provided testimony on Monday regarding the processes the JSE followed in its assessment of Sagarmatha and Ayo, including the pending investigation.
Visser was accompanied by a delegation that included JSE chief executive Nicky Newton-King.
JSE looked at all ‘facts and information’
When the companies approached the bourse with their applications to list, Visser said the JSE took its time to look at all the facts and information, and only granted approval of the relevant documentation “once we were satisfied”.
Visser described the wide-ranging role the JSE plays in protecting investors amid the turmoil of corporate scandals that have struck South Africa but admitted that it’s not always “fail proof”.
“We view financial information as the single most important information that investors have access to,” said Visser. “So there [are] a number of steps through our listing requirements that we impose on boards and directors to ensure it is information that can be relied upon.”
He admitted, however, that in reality “if there are issues of fraud and deception of management and auditors, I wish I could say [this] is something we are able to pick up at all times, but this is not always the case”.
Visser said the bourse is concerned about the testimony given by current and former Ayo executives that the company’s valuation had been “stretched” to get the shares to a specific price point of R43 per share. This has called into question the veracity of the content of the pre-listing statement.
He said the JSE has ordered Ayo to provide a factual findings report on the statements that were made before the commission.
The PIC invested R4.3 billion, buying all of Ayo’s public shares when it listed in December 2017. The state asset manager, which handles over R2 trillion in government employee pension money and other state assets, is currently involved in a process to recoup the investment.