Pinnacle extends rout on bribery chargeComment on this story
Johannesburg - Shares of mid-cap South African technology firm Pinnacle Holdings extended their slide into a second day on Wednesday, tumbling 21 percent after a company director was arrested this month for allegedly trying to bribe a senior police official.
The hardware and software distributor lost a quarter of its market value on Tuesday, when police said they had charged Executive Director Takalani Tshivhase with allegedly offering a 5 million rand bribe to a police lieutenant general to secure a contract.
Tshivhase has denied the charges.
The Johannesburg Stock Exchange also told Reuters it was investigating whether Pinnacle violated rules on timely disclosure by waiting 20 days to announce Tshivhase's arrest.
The 59-year-old was arrested on March 5 and released on bail the same day.
On March 19, days before the company announced the charges, Tshivhase sold 4 million rand of Pinnacle shares, according to a regulatory filing.
The JSE has declined to comment on whether it was investigating the share sale.
Chief executive Arnold Fourie told Reuters the charges against Tshivhase were a “huge misunderstanding.”
Fourie also said he did not believe the company had breached rules on timely disclosure.
Fourie said he knew of Tshivhase's plans to sell shares “way before” his arrest and did not believe it constituted insider trading.
Shares of Pinnacle were down 21 percent at 11.85 rand at 10:56 SA time, bringing their losses over the last two days to 40 percent and valuing the company at just over 2 billion rand. - Reuters