Accounting weekly

Ayo and AEEI fail to meet accounts deadline

Both companies were supposed to submit audited financials to the JSE by the end of 2019, reports Business Day.

Ayo Technology Solutions and its parent company African Equity Empowerment Investments (AEEI), both controlled by business person Iqbal Survé, have been censured by the JSE for not publishing audited financial statements within four months of their financial year-end.

Listed companies are expected to publish audited accounts within that time frame according to a JSE rule, which is designed to ensure investors get a timely, accurate and verified view of a company’s financial performance.

“Accordingly, all of the above companies’ listings on the JSE trading system have been annotated with an ‘RE’ to indicate that they have failed to submit their annual reports timeously and that the listing of these companies’ securities is under threat of suspension and possible removal,” the JSE said via Sens on Thursday.

In December AEEI and Ayo submitted reviewed results, which were overseen by the companies’ auditors, but not audited.

Ayo CEO Howard Plaatjies said the delay was due to additional audit and compliance requests by the JSE.

“Ayo’s signed-off, audited results are expected to be released before January 31 2020. Ayo fully co-operated with the JSE and its auditors throughout the process and was happy to comply with such requests being that they will establish the company’s results as being beyond question,” said Plaatjies in response to questions on Thursday.

A number of serious allegations were made concerning the manipulation of Ayo’s interim financial results for the six months to end-February 2018.

This included testimony from former Ayo CEO Kevin Hardy at the commission of inquiry into affairs of the Public Investment Corporation (PIC) that the interim unaudited numbers for February 2018 were inflated at the instruction of AEEI executives.

This prompted the JSE to ask the company’s auditors, BDO, to audit the interim numbers and make findings. It is unclear what the status of this request is at present.

Following the announcement, Ayo adjusted its financials by deducting R7.8m from its post-tax profit for the six months to end-February 2018. Profit after tax consequently declined from R65.9m to R58.2m.

The commission submitted its final report to President Cyril Ramaphosa in December but he has not given any indication yet of how he plans to proceed with its findings.

Investors in Ayo and AEEI are likely to wonder who will audit the financials now that the companies’ previous auditor, BDO, voluntarily terminated its relationship with them at the end of December.

Ayo was not immediately available to comment on Friday morning.