Johannesburg - A meeting this week between the JSE and the Financial Services Board (FSB) will determine whether the latter launches its own parallel investigation into suspected insider trading at listed information technology company Pinnacle Holdings.
The stock exchange is probing share transactions that took place between March 5, the day Pinnacle executive director Takalani Tshivhase was arrested and charged with offering a R5 million bribe to a police officer, and March 25, when Pinnacle informed shareholders.
Solly Keetse, the head of the FSB’s directorate of market abuse, said on Friday that the regulators would consider the merits of the case and decide if the FSB would log a formal investigation. “The JSE has the intelligence on any suspicious trade. No way can anything fall through the cracks.”
On March 19, Tshivhase sold shares in Pinnacle to the value of R4m. According to a Stock Exchange News Service (Sens) notice, the trades were done on-market and clearance to deal was obtained in terms of the JSE listings requirements.
Arnold Fourie, the chief executive, sold shares to the value of R23m on March 14, on-market and with a clearance.
JSE rules state a director may not deal in company securities at any time when he is in possession of unpublished price-sensitive information in relation to those securities.
Pinnacle did not inform shareholders on Sens or at its interim results presentation last month of Tshivhase’s arrest.
The company said it had acted on legal advice, which said it should report the matter only after charges were formerly made against Tshivhase at the Specialised Commercial Crimes Court in Pretoria.
Fourie said Pinnacle informed the market at the first available opportunity, the day after the formal court appearance. Tshivhase has denied the charges and Pinnacle said there was no reason to doubt the veracity of his denial.
Pinnacle’s stock lost nearly half its value in the two days after the information on the charges became available.
On Friday, Pinnacle’s share price was R13.90, down 1 percent from Thursday’s close.
It peaked on October 13, 2013, when it was at R24.99.
Amid this share dumping, various trusts in the Fourie family name have snapped up stock worth millions of rands in Pinnacle, taking advantage of the price, which has slumped more than 40 percent.