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PIC Inquiry hears interim report into Ayo Technology probe leaked

Lufuno Nemagovhani has told the PIC Commission of Inquiry that he is responsible for the investigation into the R4.3 billion deal.

A screengrab of PIC head of internal audit Lufuno Nemagovhani giving evidence at the PIC inquiry on 23 January 2019.

JOHANNESBURG - The head of the Public Investment Corporation’s (PIC) internal audit department says the investigation report into the dubious Ayo investment has been leaked, even though it hasn’t yet been finalised.

Lufuno Nemagovhani has told the PIC Commission of Inquiry that he is responsible for the investigation into the R4.3 billion deal, which resulted in two suspensions on Tuesday.

The investment into Iqbal Surve’s Ayo Technologies company has been flagged as controversial for some time due to the high valuation placed on the stock at its listing.

Nemagovhani says he can’t go into detail about the Ayo investigation because it’s still ongoing, but he’s concerned because the interim report has already been leaked.

“I was called by a former employee, saying they have this report.”

The PIC obtained R4.3 billion private placements in Ayo Technologies valuing the shares at R43 a piece.

They’re now sitting at just under R23; putting the PIC about R2 billion out of pocket.

Nemagovhani revealed on Wednesday that due process wasn’t followed when this deal was signed off; it’s an issue he raised back in May 2018.

AYO DEAL

Nemagovhani says due diligence was completely ignored when the controversial Ayo investment was approved.

Nemagovhani says he raised an audit query about the Ayo deal in 2018, specifically about the fact that the payment memo was signed in December 2017 before the requisite committee met to approve it.

“That was approved on 19 December 2017 before the meeting on 20 December. This is the first time that I’ve seen something like this in the PIC.”

He says this goes against the PIC’s rules, but he’s added that the investigation has not yet been completed and the report handed to the board this week was an interim report.

At the same time, the Business Day is reporting that it was acting CEO Matshepo More who chaired the committee that signed off on the investment and allegedly condoned the missing step in due diligence.

The inquiry will resume next week.

WATCH: PIC internal audit dept gives evidence at the inquiry

(Edited by Zamangwane Shange)