JUST IN | JSE fines IT group AYO R6.5 million over non-compliance – News24

JUST IN | JSE fines IT group AYO R6.5 million over non-compliance – News24

The Johannesburg Stock Exchange has imposed a fine of R6.5 million on AYO Technology Solutions, an IT group in the stable of Iqbal Survé’s Sekunjalo Group. 

Sekunjalo Investment Holdings owns 62% of African Equity Empowerment Investments (AEEI), which owns owns 49% of AYO. 

In a statement on Wednesday morning, the JSE said the fine was imposed for errors in the group’s 2018 unaudited interim results.

“[The errors resulted] in AYO having to restate its 2018 interim cost of sales, gross profit, operating expenses, investment revenue, profit after tax, inventories, deferred tax, provisions and other accounts of significance to AYO’s business and operations by as much as 50% in some instances, including a 4% decrease in gross profits,” said the JSE.       

“Whilst the 2018 interim profit after tax decreased by 19%, the 2018 interim earnings per share decreased by 13% as a result of the corrections. Further, in correcting these errors, goodwill decreased by 11%, inventories decreased by 69%, and provision liabilities increased by 61%,” it said. 

The JSE said the errors resulted from the IT group’s failure to “subject the 2018 interim accounts and underlying documents to a critical and thorough review”.

The bourse said the fine concludes its process in respect of the company itself, but added that an investigation into the conduct of current and former directors that presided at the company during the periods in question was ongoing.

AYO, in statement, said it accepts the JSE’s findings that the financial results in question did not comply with International Financial Reporting Standards. It said it “fully” co-operated with both the auditors and the JSE throughout this process.

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