Johannesburg - The Financial Services Board says a former Basil Read employee has been fined R467 388 for trading in company shares when he knew the group would make a loss.
The board says, in a statement issued on Tuesday, that its Directorate of Market Abuse referred a case against Vinayagam Kumarasamy Moodley to the Enforcement Committee of the Financial Services Board.
The directorate established that, in May 2014, Moodley, who was in the employ of Basil Read Holding at the time, had knowledge that Basil Read had incurred a loss of R54 million during the four months to end April 2014 and that the company expected to report a loss of R100 million for the six months to end June 2014.
The FSB says Moodley, while in possession of the information about the pending loss, sold 95 478 shares in Basil Read between May 26, 2016 and June 4, 2014. The price he sold the shares at was between 810 cents a share and 882 cents a share.
“These shares were sold prior to the publication of the aforementioned information to the market.”
The FSB says, when Basil Read published the details of the losses on June 6, 2014 at 16h45, the Basil Read share price decreased from a closing price of 778 cps to a closing price of 700 cps on June 9, 2014.
“The decline in the Basil Read share price proved that the details of the losses was information that had a material effect on the Basil Read share price.”
As a result, the FSB says, the parties agreed on the penalty.
IOL