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General – Censure imposed by the JSE on Ms Naahied Gamieldien, former CFO of AYO
GEN – General – Ms Naahied Gamieldien - Former CFO and director of AYO Technology Solutions
Limited
Censure imposed by the JSE on Ms Naahied Gamieldien in her capacity as the former Chief Financial
Officer of AYO Technology Solutions Limited (“Company” or “AYO”)
The JSE hereby informs stakeholders of the following findings in respect of Ms Gamieldien:
Background
1. AYO listed on the JSE on 21 December 2017. The day after its listing on the JSE, on 22 December
2017, AYO entered into the first of three performance management agreements (“PMAs”) with
an asset manager, 3 Laws Capital (Pty) Ltd (“3 Laws”), in terms of which 3 Laws would manage
funds invested for and on behalf of AYO to diversify AYO’s treasury risk function.
2. At the time of entering into the PMAs, the majority shareholder in 3 Laws was Sekunjalo
Investment Holdings (Pty) Ltd which held 85% of 3 Laws. Sekunjalo Investment held 61% of
African Equity Empowerment Investment Holdings Limited which in turn held 49% of AYO.
Therefore, 3 Laws was a related party to AYO in terms of paragraph 10.1 of the JSE Listings
Requirements.
3. In accordance with the provisions of section 10 of the Listings Requirements, a related party
transaction means an acquisition or disposal, or other agreement, or any variation or novation
of an existing agreement, between the issuer or any of its subsidiaries and a related party,
as defined.
4. Related party transactions must be categorised to determine the percentage ratios calculated as
a percentage of consideration to market capitalisation or dilution of number of shares in issue.
Related party transactions with a percentage ratio of more than 5% requires a SENS announcement,
circular to shareholders incorporating a fairness opinion, and shareholder approval of the
transaction (votes of the related party and its associates excluded), prior to completion and/or
implementation of the transaction. Small related party transactions are classified as transactions
with a percentage ratio of more than 0.25% but less than or equal to 5% which requires that, prior
to completing and/or implementing the transaction, an issuer must inform the JSE of the transaction
in writing, provide the JSE with written confirmation from an independent professional expert that
the terms of the transaction are fair as far as shareholders are concerned, publish details of the
proposed transaction on SENS including the fairness thereof, and if the independent professional
expert finds the transaction to be unfair, then the usual related party transaction requirements
referred to above apply.
Transactions with 3 Laws
5. Details of the PMAs entered into between AYO and 3 Laws are set out hereunder:
PMA1
• Verbal agreement entered into on 22 December 2017
• R70 million advanced to 3 Laws on 22 December 2017 and returned to AYO on
22 February 2019
PMA2
• Written agreement entered into on 28 February 2018 in terms of a resolution of the board
of directors of AYO subject to these funds being returned to AYO by 31 August 2018
• R400 million advanced to 3 Laws on 5 March 2018 and returned to AYO on 20 August 2018
PMA3
• Written agreement entered into on 27 November 2018 in terms of a resolution of the
board of directors of AYO
• R400 million advanced to 3 Laws on 29 November 2018 and returned to AYO on 22
February 2019.
6. As confirmed by AYO and recorded as such in the PMAs, the salient terms of the PMAs
highlighted the following:
• No funds should be transferred to 3 Laws or to any account in the name of 3 Laws in
carrying out its duties in terms of the agreements
• The funds must be placed in an AYO custodian account / AYO bank account for the benefit
of AYO as are typical with such asset management agreements.
• 3 Laws is only entitled to earn a fee which is market related.
• Any investment made on behalf of AYO must be within the terms of the investment
mandate set out in the PMAs.
• Any investment instruction given by 3 Laws must be made in the name of AYO and the
value of the investment is recognised and recorded as part of AYO’s assets in the
financial statements.
7. On 12 March 2020, the Report of The Judicial Commission of Inquiry into Allegations of
Impropriety at the Public Investment Corporation (“PIC Report”) was released and published.
The PIC Report included an analysis of 3 Laws’ Nedbank current account indicating the
movement of monies between AYO, Sekunjalo Capital (Pty) Ltd and 3 Laws. Based thereon and
after robust investigation and engagement with AYO, the JSE discovered that the funds were not
invested by AYO with 3 Laws in accordance with the terms and provisions of the PMAs and that
the transfer of funds to 3 Laws therefore constituted related party transactions in terms of
the Listings Requirements. This was evident from the following:
• All funds were transferred by AYO directly into 3 Laws current bank account held with
Nedbank and Standard Bank and not paid into a separate banking account in the name of
AYO, in conflict with the express provisions of the PMAs.
• R70 million was invested with 3 Laws in terms of PMA1 on 22 December 2017, of which R35
million was deposited into 3 Laws’ bank account and a further R35 million into the bank
account of Sekunjalo Capital (Pty) Ltd.
• AYO’s bank records reflect that on 31 August 2018 an amount of R400 million previously
transferred to 3 Laws in terms of PMA2 was returned into AYO’s bank account and
referenced as “3 Laws Capital”, however it was not returned to AYO by 3 Laws but from
some other source.
• 3 Laws returned an amount of R470 million to AYO on 22 February 2019 in terms of PMA1
and PMA3 in two separate payments. On the same day that 3 Laws returned the R470
million to 3 Laws, 3 Laws received payments of R35 million from Africa News Agency (ANA)
and R30 million from SGB Securities. The total of R470 million returned by 3 Laws to AYO
included the monies received from ANA and SGB Securities on the same day, therefore
confirming that there was no segregation of funds or accounts for purposes of AYO’s
investment. This was also a direct result of AYO paying the funds directly into 3 Laws
current bank account.
Ms Gamieldien’s conduct as a director of a listed company
8. Ms Gamieldien, in her capacity as the Chief Financial Officer and director of AYO at the time,
carried out all three payments directly into 3 Laws bank account contrary to the prescripts and
provisions of the PMAs and she was the signatory of the PMAs that gave effect to the
transactions with 3 Laws, a related party to AYO. The Listings Requirements requires that, prior
to completing and/or implementing the transactions with related parties, the JSE and the
market must be informed through SENS of the details of the transactions, the approval of
shareholders must be obtained (where required) or a confirmation to shareholders that the
terms of the transactions were fair. Ms Gamieldien, through her actions, caused and/or
contributed to AYO’s breach of the JSE’s Listings Requirements.
9. Furthermore, in preparing the unaudited interim financial statements for the six months ended
28 February 2018 (“unaudited 2018 interim results”), the Company, through Ms Gamieldien as
the Chief Financial Officer at the time, omitted to disclose in AYO’s unaudited 2018 interim
results that an amount of R400 million was paid to 3 Laws in terms of PMA2 on 5 March 2018
under “events after reporting period” in accordance with IFRS, specifically IAS 34.
10. Accordingly and for these reasons, the JSE found Ms Gamieldien to be in breach of the following
provisions of the Listings Requirements:
a) Paragraph 8.57(a) for omitting to disclose a material investment of R400 million paid to 3
Laws on 5 March 2018 as a (non-adjusting) post-balance sheet event in accordance with IAS 34
in the unaudited 2018 interim results which directly resulted and/or contributed to AYO breaching
the Listings Requirements;
b) Paragraph 10.4 for her role in carrying out the payments directly into 3 Laws bank account in
respect of the PMAs to which she was the signatory, which payments directly resulted and/or
contributed to AYO breaching the Listings Requirements; and
c) General Principle (v) which required her to ensure that all parties involved in the
dissemination of information into the marketplace, whether directly to holders of
relevant securities or to the public, observe the highest standards of care in doing so.
JSE’s decision to censure Ms Gamieldien
11. Directors of issuers fulfil a critical role in ensuring that listed companies comply with the Listings
Requirements. Issuers of securities listed on the JSE are only able to comply with the Listings
Requirements if their directors take the appropriate actions to ensure that such issuers comply
in all aspects with its provisions.
12. Directors of companies listed on the JSE are bound by and must comply with the JSE’s Listings
Requirements, as amended from time to time, and undertake and agree to discharge their duties in
ensuring such compliance whilst they are directors.
13. For these reasons and with reference to the JSE’s findings of breach, the JSE has decided to impose
a public censure and a fine in the amount of R250 000 (two hundred and fifty thousand rand) on Ms Gamieldien
for her failure to comply with important provisions of the Listings Requirements.
14. In arriving at this decision, the JSE considered amongst other factors, that Ms Gamieldien was constructive
and transparent in admitting her shortcomings to the JSE and fully co-operated with the JSE’s investigation.
15. The fine imposed against Ms Gamieldien will be appropriated in accordance with section 11(4) of the
Financial Markets Act, 19 of 2012 read with section 1.25 of the Listings Requirements which includes,
inter alia the settlement of any external costs incurred by the JSE which may arise through the enforcement
of the provisions of the Listings Requirements and/or in furtherance thereof.
16. The investigation into the conduct of other individuals that presided at the Company during the periods
in question and who were bound by the Listings Requirements is ongoing.
29 November 2022
Date: 29-11-2022 07:05:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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