The JSE says it will oppose Ayo Technology’s application to the Financial Services Tribunal to have its decision to impose a R1.5 million fine and public censure on the company reconsidered.
The bourse made the announcement to shareholders on Thursday via Sens. The disciplinary measure comes after the JSE found the technology investment company to be in breach of its listing requirements.
JSE investigations into the company’s bank accounts found that Ayo had failed to inform shareholders timeously of several related party transactions between it, asset manager 3 Laws Capital and Sekunjalo Investments which has a majority stake in 3 Laws Capital.
“Crucial decisions undertaken by the company such as related party transactions require the JSE and the market to be timeously informed thereof especially on matters which require investors to exercise important investment decisions or voting rights,” the JSE said.
“Compliance with the listings requirements is aimed at ensuring investors and potential investors receive complete, relevant and important information to allow investors to make informed decisions and is simultaneously aimed at investor protection and investor confidence.
“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 R1 500 000 on AYO as a result of its failure to comply with important provisions of the listings requirements,” it added.
Ayo’s share price tanked by over 20% in early morning trade on Thursday, following the JSE’s update, leaving the stock price hovering at R2.40.
Suspension application fails
When filing its reconsideration application with the tribunal on 9 December, Ayo also submitted an application for the JSE’s punishment to be suspended as it awaits the tribunal’s decision.
However, the tribunal’s Judge Louis Theodor Christian Harms – the deputy chair of the Financial Services Tribunal – dismissed Ayo’s suspension request on 21 December, meaning that the JSE’s decision in the interim stands and is enforceable.
The JSE further added that it has not exhausted its investigations into the company as yet and will continue to look into actions of individuals of interest.
“The investigation into the conduct of individuals that presided at the company during the periods in question and who were bound by the listings requirements is ongoing.”
News of the JSE’s decision to impose public censure and a fine on the company comes after a former Ayo executive as well as an African Equity Empowerment Investment (AEEI) – Ayo’s parent company – director were also issued with a public censure and a fine of R250 000 each by the exchange.
The JSE believes that Naahied Gamieldien, a former CFO and director of Ayo Technology and Abdul Malick Salie who is a former director of AEEI, are believed by the JSE to have played a part in Ayo’s breaking of JSE listing rules.