Click here to read the full judgment on Saflii

[1]          The plaintiffs in case no. 9141/2019, the Public Investment SOC Limited Corporation (the PIC) and the Government Employees Pension Fund (the GEPF), respectively, have brought an action against Ayo Technologies Solutions Ltd (Ayo) for payment of the sum of almost R4,3 billion, which was the subscription price paid by the PIC, in its capacity as the GEPF’s investment manager, for shares in Ayo at the time of the latter’s listing on the Johannesburg Stock Exchange. Three causes of action are pleaded in the particulars of claim, namely (i) that the PIC’s decision to invest in Ayo fell foul of the principle of legality and falls to be reviewed and set aside (a ‘self-review’, in other words), that the person or persons purporting to represent the PIC in entering into the transaction had lacked authority to do so and (iii) that the transaction had been induced by material misrepresentations by the persons representing Ayo.

[2]          One of the pleaded issues in the action, bearing on the third of the forementioned causes of action, is the use by Ayo of the funds generated by the transaction.  It is the plaintiffs’ case that it had been represented by Ayo that the funds would be applied in furtherance of the strategy to grow Ayo’s position in the information and communications technology sector. The forecast achievement of significant market share growth pursuant to the indicated strategy had played a material role in the representations made to the PIC to Ayo in support of the private placement of the shares at a price of R43 per share.  The PIC alleges that that the funds were used instead, at least in material part, to settle the outstanding liabilities of certain of Ayo’s related companies.