The JSE has imposed a public censure and a fine of R500,000 on Ayo Technology Solutions, it said on Thursday.
The fine and censure relate to Ayo’s failure to disclose terms of a settlement agreement between it, the Public Investment Corporation (PIC) and the Government Employees Pension Fund (GEPF) in 2023, which the JSE has found breached its listing requirements.
Releasing its findings, the JSE said Ayo had been trading under a cautionary due to legal proceedings between the company, the PIC and the GEPF since March 6 2023. This was regarding the summons issued by the PIC and the GEPF seeking to declare the subscription agreement entered into between the PIC and Ayo unlawful and set aside.
On March 24 2023, Ayo published an announcement on the JSE’s Sens platform to withdraw the cautionary, stating that the legal proceedings had ceased after the amicable conclusion of a settlement agreement between the parties. Ayo did not include the terms of the settlement agreement in the announcement, claiming they were confidential.
The next day an article was published containing the terms of the settlement agreement between the parties, one of which was that Ayo agreed to repurchase its ordinary shares in issue from the GEPF for about R600m.
Other terms included a further repurchase option granted to the GEPF, and certain minority protections afforded to the fund.
According to the JSE’s listings requirements, when an issuer conducts a specific repurchase of its shares, it must publish a Sens announcement with full details immediately after it has agreed the terms, which in this case should have been on March 24 2023. Instead, Ayo published a withdrawal of cautionary announcement and did not publish the required Sens announcement containing full details of the specific repurchase.
After numerous inquiries from the JSE and its insistence on the publication of a Sens announcement, Ayo published an announcement on Sens titled “voluntary announcement” containing some details of the settlement agreement.
This announcement did not comply with requisite disclosures and approvals that would ordinarily be required for a specific repurchase of shares, so on April 4 2023 the JSE directed Ayo to publish a further supplementary Sens announcement.
AYO published an announcement on Sens on May 18 2023 containing all the information required in terms of paragraph 11.25 of the listing requirements.
“Consequently, the company deprived shareholders of access to important information regarding the specific repurchase for nearly two months,” the JSE said.
“This lack of timely disclosure may have affected shareholders’ ability to make informed decisions, potentially undermining transparency and fair market practices.”
Accordingly, the JSE found Ayo to be in breach of paragraph 11.25 of the listings requirements for its failure to publish a Sens announcement containing full details of the specific repurchase immediately after it had entered into and agreed the terms of the settlement agreement with the parties on March 23 2023.
“The main purpose of paragraph 11.25 of the listings requirements is to ensure that a repurchase of shares by a company from specifically named parties are conducted in a transparent and fair manner. This requirement underscores the importance of keeping the market informed and maintaining investor confidence by ensuring that crucial and relevant information is published on Sens, especially when developments have a potential effect on investor decisions, their assessment of the company’s outlook and the value of the shares,” the JSE said.
“The JSE finds it unacceptable that Ayo failed to immediately inform shareholders that it had agreed to repurchase its shares from the parties as part of the settlement agreement.”
The JSE therefore decided to impose the public censure and the fine, which was suspended for five years, on condition that Ayo was not found to be in breach of similar provisions of the listings requirements during the period of suspension, it said.
Last month Iqbal Survé’s Sekunjalo Investment Holdings made an offer of R80.77m to buy all the Ayo shares it does not already own.
The offer is subject to the approval of a proposed delisting from the JSE.
MackenzieJ@arena.africa
JSE fines Ayo R500,000 for rules breach
Bourse finds that Ayo deprived shareholders of access to important information about the repurchase for nearly two months
The JSE has imposed a public censure and a fine of R500,000 on Ayo Technology Solutions, it said on Thursday.
The fine and censure relate to Ayo’s failure to disclose terms of a settlement agreement between it, the Public Investment Corporation (PIC) and the Government Employees Pension Fund (GEPF) in 2023, which the JSE has found breached its listing requirements.
Releasing its findings, the JSE said Ayo had been trading under a cautionary due to legal proceedings between the company, the PIC and the GEPF since March 6 2023. This was regarding the summons issued by the PIC and the GEPF seeking to declare the subscription agreement entered into between the PIC and Ayo unlawful and set aside.
On March 24 2023, Ayo published an announcement on the JSE’s Sens platform to withdraw the cautionary, stating that the legal proceedings had ceased after the amicable conclusion of a settlement agreement between the parties. Ayo did not include the terms of the settlement agreement in the announcement, claiming they were confidential.
The next day an article was published containing the terms of the settlement agreement between the parties, one of which was that Ayo agreed to repurchase its ordinary shares in issue from the GEPF for about R600m.
Other terms included a further repurchase option granted to the GEPF, and certain minority protections afforded to the fund.
According to the JSE’s listings requirements, when an issuer conducts a specific repurchase of its shares, it must publish a Sens announcement with full details immediately after it has agreed the terms, which in this case should have been on March 24 2023. Instead, Ayo published a withdrawal of cautionary announcement and did not publish the required Sens announcement containing full details of the specific repurchase.
After numerous inquiries from the JSE and its insistence on the publication of a Sens announcement, Ayo published an announcement on Sens titled “voluntary announcement” containing some details of the settlement agreement.
This announcement did not comply with requisite disclosures and approvals that would ordinarily be required for a specific repurchase of shares, so on April 4 2023 the JSE directed Ayo to publish a further supplementary Sens announcement.
AYO published an announcement on Sens on May 18 2023 containing all the information required in terms of paragraph 11.25 of the listing requirements.
“Consequently, the company deprived shareholders of access to important information regarding the specific repurchase for nearly two months,” the JSE said.
“This lack of timely disclosure may have affected shareholders’ ability to make informed decisions, potentially undermining transparency and fair market practices.”
Accordingly, the JSE found Ayo to be in breach of paragraph 11.25 of the listings requirements for its failure to publish a Sens announcement containing full details of the specific repurchase immediately after it had entered into and agreed the terms of the settlement agreement with the parties on March 23 2023.
“The main purpose of paragraph 11.25 of the listings requirements is to ensure that a repurchase of shares by a company from specifically named parties are conducted in a transparent and fair manner. This requirement underscores the importance of keeping the market informed and maintaining investor confidence by ensuring that crucial and relevant information is published on Sens, especially when developments have a potential effect on investor decisions, their assessment of the company’s outlook and the value of the shares,” the JSE said.
“The JSE finds it unacceptable that Ayo failed to immediately inform shareholders that it had agreed to repurchase its shares from the parties as part of the settlement agreement.”
The JSE therefore decided to impose the public censure and the fine, which was suspended for five years, on condition that Ayo was not found to be in breach of similar provisions of the listings requirements during the period of suspension, it said.
Last month Iqbal Survé’s Sekunjalo Investment Holdings made an offer of R80.77m to buy all the Ayo shares it does not already own.
The offer is subject to the approval of a proposed delisting from the JSE.
MackenzieJ@arena.africa
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending Now
Latest Videos