GEN – General – Mr Khalid Abdulla – Director of AYO Technology Solutions Limited
Censure imposed by the JSE on Mr Khalid Abdulla in his capacity as a director of AYO Technology Solutions
Limited (“Company” or “AYO”)


The JSE hereby informs stakeholders of the following findings in respect of Mr Abdulla:


BACKGROUND
1.     Stakeholders are referred to the JSE’s announcement published on SENS on 27 August 2020 wherein the
       JSE imposed a public censure and financial penalties amounting to R6.5 million against AYO as a result
       of its transgressions of the Listings Requirements.


2.     Mr Khalid Abdulla was appointed as a non-executive director of AYO since its listing on the JSE on 21
       December 2017 until August 2018 and he currently serves as the executive deputy chairman.


3.     Pursuant to the JSE’s investigation into the conduct of certain individuals that presided at the Company
       during the periods in question, the JSE has concluded its investigation against Mr Abdulla as a director
       of AYO at the time of the transgressions referred to in paragraph 1 above.


4.     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, in terms of which 3 Laws would manage funds invested for and on behalf of AYO to
       diversify AYO’s treasury risk function.


5.     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.


6.     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.

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7.     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 CAPITAL (PTY) LTD (“3 LAWS”)
8.     Details of the PMAs entered into by 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.


9.     As confirmed by AYO and recorded as such in the PMAs, the salient terms of the PMAs highlighted the
       following:
         • No funds may 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.
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         • The funds must be placed in an AYO custodian account / AYO bank account with Nedbank 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 be recognised and recorded as part of AYO’s assets in the financial statements.


10. 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’ proprietary and current bank account (“3
              Laws’ bank account”) held with Nedbank and Standard Bank and not paid into a separate and/or
              segregated banking account in the name of AYO, in conflict with the express provisions of the PMAs.
         • AYO did not transfer an amount of R70 million to 3 Laws in terms of PMA1 on 22 December 2017.
              An amount of R35 million was transferred directly into 3 Laws’ bank account and a further R35
              million was transferred directly into the bank account of Sekunjalo Capital (Pty) Ltd on 3 Laws
              instruction.
         • 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 by a different entity.
         • 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, further 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’ bank account.
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11. Mr Abdulla, in his capacity as a non-executive director of AYO at the time, facilitated the transactions
       with 3 Laws and negotiated with 3 Laws for the payments to be made directly into 3 Laws’ bank account
       contrary to the prescripts and provisions of PMA1 and PMA2. AYO did not, prior to completing and/or
       implementing the transactions with 3 Laws, inform the JSE and the market through SENS of the details
       of the transactions, obtain the approval of shareholders where required or confirm to shareholders that
       the terms of the transactions were fair, as required. Mr Abdulla, through his role in these transactions,
       caused and/or contributed to AYO’s breach of the JSE’s Listings Requirements regarding related party
       transactions.


12. Accordingly and for these reasons, the JSE found Mr Abdulla, in his capacity as a non-executive director
       of AYO at the time, to be in breach of the provisions of paragraph 10.4 of the Listings Requirements for
       his role in facilitating and negotiating the payments directly into 3 Laws’ bank account in respect of
       PMA1 and PMA2.


INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2018
13. Ms Naahied Gamieldien, AYO’s former Chief Financial Officer (“former CFO”), drafted AYO’s maiden
       interim financial statements for the six months ended 28 February 2018 (“unaudited 2018 interim
       results”). On 26 April 2018, the former CFO emailed a copy of the draft unaudited 2018 interim results
       to Mr Abdulla and the Chief Investment Officer of African Equity Empowerment Investment Holdings
       Limited (“AEEI”), Mr Abdul Malick Salie, before going on leave. In the former CFO’s absence, Mr Abdulla
       instructed Mr Salie, an employee and executive director of AEEI, a separately listed company on the JSE
       and parent company of AYO, to effect adjustments to specific line items of AYO’s draft unaudited 2018
       interim results, namely the sales commission, warranty provision, Sasol project salaries, certain legal
       fees/listing costs and the treatment of an IFRS 2 share-based payment charge. AYO management,
       including Mr Abdulla, approved the unaudited 2018 interim results for publication which contained
       these adjustments.


14. Mr Abdulla gave instructions to Mr Salie who was not a director or employee of AYO to amend specific
       line items in the draft unaudited 2018 interim results which were improper and not in accordance with
       the requirements of IFRS, culminating in AYO’s misstated financial information that had to be corrected
       through restatement. Furthermore, Mr Abdulla was one of the AYO board members who approved the
       unaudited 2018 interim results which contained the improper adjustments for dissemination to
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       shareholders and the market. AYO’s published unaudited 2018 interim results in respect of the
       adjustments were subsequently restated.


15. Mr Abdulla’s role in instructing the adjustments to the specific line items in AYO’s unaudited 2018
       interim results caused and/or contributed to AYO breaching IFRS and the Listings Requirements for
       which the JSE imposed a financial penalty.


16. Accordingly and for these reasons, the JSE found Mr Abdulla, in his capacity as a non-executive director
       of AYO at the time, to be in breach of the following provisions of the Listings Requirements:


         (a) Paragraph 8.57(a) as his instructions to make improper adjustments to certain line items in AYO’s
              financial statements directly resulted and/or contributed to AYO breaching the Listings
              Requirements; and
         (b) General Principle (v) which required him 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 MR ABDULLA
17. 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.


18. 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.


19. The accuracy and reliability of financial information published by companies are of critical importance
       in ensuring a fair, efficient and transparent market. The provisions of the Listings Requirements, which
       impose various important obligations on listed companies in respect of the disclosure of financial
       information, contributes to the integrity of the market and promotes investor confidence.


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20. 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 R2 million (two million rand) on Mr Abdulla for his failure to
       comply with important provisions of the Listings Requirements.


21. The fine imposed against Mr Abdulla 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.


MR ABDULLA’S APPLICATION FOR RECONSIDERATION OF THE JSE’S DECISION IN TERMS OF SECTION 230
OF THE FINANCIAL SECTOR REGULATION ACT (“FSRA”), MR ABDULLA’S APPLICATION FOR THE SUSPENSION
OF THE JSE’S DECISION IN TERMS OF SECTION 231 OF THE FSRA, AND MR ABDULLA’S URGENT APPLICATION
TO THE HIGH COURT


22. On 20 March 2023, Mr Abdulla applied to the Financial Services Tribunal ("FST") for the reconsideration
       of the JSE's decision in terms of section 230(1) of the FSRA, under reference number JSE3/2023 (the
       "Reconsideration Application"). On the same day, Mr Abdulla applied to the FST in terms of section 231
       of the FSRA for an order suspending the JSE's decision, pending the outcome of the Reconsideration
       Application (the "Suspension Application").


23. The JSE opposed the Reconsideration Application and the Suspension Application. On 25 April 2023,
       Retired Judge Harms, the Deputy Chair of the FST, suspended the financial penalty imposed by the JSE
       on Mr Abdulla and dismissed Mr Abdulla's application for the suspension of the public censure imposed
       on him.


24. Mr Abdulla then launched an urgent application against the JSE in the Johannesburg division of the
       Gauteng High Court under case no. 2023-040885, in which he sought to review and set aside the ruling
       of Retired Judge Harms in the Suspension Application, and an interdict to prevent the JSE from
       publishing the ruling in the Suspension Application (the "Urgent Application"). The JSE opposed the
       Urgent Application and undertook not to impose its public censure and not to publish the ruling in the
       Suspension Application pending the outcome of the Urgent Application.


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25. The Urgent Application was heard on 31 August 2023 and on 5 September 2023, Judge Wilson handed
       down his judgment in which he dismissed Mr Abdulla's Urgent Application, with costs, including the
       costs of two counsel.


26. The JSE's decision in respect of the public censure imposed on Mr Abdulla is therefore enforceable.


27. We await the outcome of Mr Abdulla's Reconsideration Application, which the JSE has opposed, and
       which will be heard by the FST on 15 September 2023.


5 September 2023




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