PIC board berates handling of Ayo settlement, but says deal is ‘justified’

Despite the board of the Public Investment Corporation (PIC) blasting executives for the discreet manner in which it handled a court settlement with JSE-listed IT company Ayo Technology Solutions this week, the board considers the settlement a good commercial move.

“Whilst deeply concerned about management’s handling of the governance processes, the Board believes the Ayo settlement, which is an order of the court, is justified as a good commercial decision,” it said in a statement on Thursday evening.

Read: Ayo and PIC settlement ‘confidential’ for now

Last month, the PIC signed a settlement agreement with Ayo, bringing to an end a court battle between the two in which the PIC moved to set aside its investment in Ayo and recover funds to the tune of R4.3 billion.

The board of the PIC, the largest asset management firm on the continent with over R2.5 trillion of assets under management, said its executives did not timeously inform the board of their intention to settle with Ayo.

This would have been in line with the PIC’s governance processes.

The issue was discussed in a meeting held on Monday, where both the Ayo settlement and governance issues were discussed.

“This settlement seeks to recover money from a questionable investment, salvaging value for its client and its beneficiaries, whilst ensuring that Ayo Technologies remains a going concern,” the PIC said.

Following the settlement, the PIC board said it informed its executives that it will continuously engage with the management team to improve governance.

Fiduciary duties

PIC chairperson David Masondo said the board remains responsible for sound corporate governance as well as promoting and safeguarding effective management as part of its fiduciary duties.

“Good governance, appropriate transparency, accountability and integrity should be principles embedded in every decision the PIC makes.”

“This is more important in the light of the findings of the Mpati Commission chaired by former President of the Supreme Court of Appeal,” added Masondo.