The former chief investment officer at AYO Technology Solutions testified before the judicial commission of inquiry on Monday that he valued the IT company at between R700-million and R1-billion - far below the R14.8-billion determined by the State-run asset manager.
This corresponded to about 5% of the Public Investment Corporation's (PIC's) valuation.
Siphiwe Nodwele told the commission that it was apparent that officials were “instructed to do whatever it takes to build up the valuation to make sure that the company is R14.8-billion in order to attract the highest possible investment from the PIC.”
The commission is investigating allegations of wrongdoing at the state-run asset manager, which manages R2.2-trillion in investments on behalf of public servants.
The PIC invested R4.3-billion in AYO in late 2017. The group's share price has since plunged from R45 a share to R15 a share.
Asked by Assistant Commissioner Emmanuel Lediga about what would have been a suitable valuation, Nodwele said it would have been R700-million or at most R1-billion.
Nodwele resigned from AYO in August 2018.
His statements support evidence previously given by PIC executives involved in the appraisal of the business, who testified that the initial public offering (IPO) of the company linked to businessman was significantly overvalued.
Survé, who testified before the commission for two days last week, has denied the company was overvalued.
Nodwele on Monday recalled a meeting with the PIC on December 14, 2017, prior to AYO’s listing.
'Just a technicality'
He said he had not properly prepared for it. However, Khalid Adbullah, the CEO of AEEI, and Salim Young, former chairperson of the AYO board, assured him that the meeting was “just a technicality and the funds were already authorised, and therefore we should not worry.”
Nodwele’s evidence also touched on the seemingly rushed process to go ahead with the AYO listing in late 2017.
He said he had deduced that the process was hurried so as to avoid any possible interruption due to leadership changes that could have followed the African National Congress (ANC) elective conference in December 2017.
“There was apprehension within the group, I imagine from Iqbal [Survé] himself, that any changes to the leadership of the ANC would lead to changes in the PIC management and remove whatever influence he had over the like of Dr Matjila.”
Survé last week denied he had an improper relationship with Matjila, or that the two had colluded in finalising deals.
Nodwele's evidence also touched on a transfer of R400-million from AYO to 3 Laws Capital, an asset manager, which has Survé as one of its directors.
He said on March 2, 2018, he had received a call from the company CFO, Naahied Gamieldien, informing him that Abdullah had instructed her to transfer R400-million into 3 Laws.
The instruction for the transfer had come from Surve, and Gamieldien had phoned Nodwele to ask if such a transaction was allowed under the company's Memorandum of Incorporation.
"Everything felt wrong about that process," he said, adding that the urgency for the release of these funds made him worry whether "this was a legitimate business transaction or the beginning of the siphoning of the cash from our bank accounts as critics had feared."
He added that there were many theories about where the funds were directed.
Gamieldien thought it was "to buy apartments at the Silo" - while Arthur Johanson, the chief investment officer at 3 Laws Capital, believed that it was "designated for the pre-listing of Sagarmatha", according to Nodwele's evidence. He said he and other colleagues thought is was to be used for the repayment of the Independent Media loan.
Survé, meanwhile, last week said that the 3 Laws mandate had been terminated.
"That money is back with AYO because of the media hype. I advised the chair, the CEO of 3 Laws that he must please repay that money back to AYO even though it’s AYO’s money - it was in the 3 Laws account. That’s been repaid along with the interest," he said.