Africa’s biggest money manager to probe Ayo purchase process

The Public Investment Corp. is looking into how Africa’s biggest money manager decided to spend R4.3 billion ($341 million) to back last year’s initial public offering of I.T company Ayo Technology Solutions.

The PIC, which manages South African state-worker pensions, paid R43 a share for a 29% stake, valuing Ayo at R14.8 billion even though its assets were estimated at R292 million. That was at the top of an issue price range of R28 to R43, according to a November 7 note to shareholders. The stock has lost 19% since the December listing.

“The investment committee wants to ensure that all investment processes were followed,” Deon Botha, PIC’s head of corporate affairs, said Tuesday. Earlier, Johannesburg-based Business Day said the purchase wasn’t put to PIC’s board and some board members are now asking an investment committee examine the deal, the newspaper said.

Ayo shares slumped 13% to R35 as of 12:20 pm in Johannesburg. On April 23, the stock tumbled after Johannesburg-based Fin24 reported that South Africa’s Public Servants Association had questioned the deal. Ayo is controlled by Iqbal Surve, the businessman who was forced to cancel a listing of media group Sagarmatha Technologies last month.