Business

Iqbal Survé threatens to sue for ‘hundreds of millions, if not billions’

2018-12-18 00:00

Media mogul Iqbal Survé has threatened to sue various unnamed “media establishments, journalists and individuals” for “hundreds of millions, if not billions” of rands.

Another set of criminal charges was threatened against unnamed individuals by the chair of Ayo Technology Solutions, Wallace Mgoqi, apparently in relation to leaked documents reported on by City Press and other media last week.

Ayo is indirectly 30%-owned by Survé.

The CEO of Survé’s flagship listed company, African Equity Empowerment Investments (AEEI), Khalid Abdullah, simultaneously laid a charge of attempted extortion against Magda Wierzycka, the CEO of JSE-listed Sygnia, and a fierce Survé critic in her column in Business Day and on other platforms.

This fight-back follows a City Press report last week on the apparently wide-ranging governance failures at companies Survé controls, mostly involving the controversial R4.3 billion investment the Public Investment Corporation (PIC) made into Ayo late last year.

Read: How the PIC, Iqbal Survé took state pensioners for a ride

The extortion claim against Wierzycka follows her offer, apparently on November 30, to buy back all the shares in Sygnia owned by AEEI as well as Survé and Abdullah – and “move on” from her stories of Survé companies.

Abdullah, accompanied to the police station by Survé and journalists from Independent News Media, another Survé-controlled company, laid the charge last week.

Wierzycka does not deny the offer she made, but has denied the interpretation by Abdullah that she was offering to censure her writing as well.

WhatsApp messages from Wierzycka to Abdullah have been published on social media by Independent journalist Ayanda Mdluli and support the quid pro quo Abdullah claims Wierzycka offered him.

“Khalid, I would like to buy out your Sygnia shares. We don’t have a good relationship and it will continue deteriorating,” she wrote.

“If we part company now I will move on from Ayo/Vunani/Sekunjalo stories,” Wierzycka wrote.

She told City Press: “I have published all I know about Ayo already based on the analysis of its reports and trading patterns of the share”, suggesting that she was done writing about it anyway.

“This is a desperate attempt by AEEI and Iqbal Survé to distract attention from what is happening to the R4.3 billion investment by PIC in Ayo Technologies,” said Wierzycka.

AEEI owns about 2.7 million Sygnia shares; Sekunjalo, 100%-owned by Survé, has another 453 000. Abdullah personally has a Sygnia holding of 252 000 shares.

Wierzycka said the price she offered was R7.50 a share or R24.5 million in total; Abdullah wanted R20 a share or R67.8 million in total.

Both prices are opportunistic.

Although Wierzycka’s offer was equal to the market price on November 30, this was an exceptional low point for the Sygnia share price.

If AEEI, Abdullah and Survé had sold their shares at R7.50, Wierzycka would have made a profit of R4 million by Friday. 

Wierzycka however said that it was not her personally offering to buy the shares, but rather another director of Sygnia who has already bought 1.7 million Sygnia shares at R7.40 that week.

That means that there was no benefit to her at all, she said. “I cannot control what people offer,” she said.

She added that she had, in May this year, offered to buy out AEEI at between R11 and R12 per share, based on the market price at the time. If they had accepted that offer, they would have spared themselves significant losses as the Sygnia share price is currently around R9. 

If Wierzycka, however, paid them the R20 they wanted they would have made a profit of at least R25 million, based on City Press’ calculations.

The Sygnia share price last touched R20 in May 2016.

The AEEI, Sekunjalo and Abdullah shareholdings in Sygnia were acquired in two main tranches – when Sygnia listed on the JSE in 2015 and in August last year during a rights issue.

Using public JSE data, City Press calculates that AEEI, Abdullah and Survé paid at most about R43 million in total for the shares they want Wierzycka to buy for R68 million.

According to Wierzycka, they paid in total only R29 million for all their shares, meaning they were demanding a profit of R39 million.

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January 20 2019