The FSCA has been investigating insider trading on the Steinhoff International shares and it said a week before the collapse of the group’s share price, 30.7million shares were traded with a total market value of more than R1.7billion.
This comes after a report in the media that former chief executive Markus Jooste, who resigned after the scandal, reportedly advised friends to sell the group’s shares a week before the share price collapsed.
However, after investigating the claims the FSCA said yesterday that it had closed its files on three accounts where more than R418.88million worth of shares were traded. This brought the total number of accounts investigated for insider trading with no adverse findings to a total of 56.
“We found no reason to believe any of these shares were traded in contravention of the Financial Markets Act,” Brandon Topham, a divisional executive for investigation and enforcement at the FSCA, said.
However, Jordan Weir, a trader at Citadel, said the damage had already been done to Steinhoff’s share price and investors alike regardless of what had been uncovered through the investigations surrounding Steinhoff, and indeed what was still to be revealed.
“From here on not much is happening, except for the curtains being lifted bit by bit for shareholders and the public, shedding light on all the past discrepancies entangling Steinhoff. No major benefit to Steinhoff or its shareholders is likely to be seen from these kinds of announcements. Instead it functions more as a process of clearing the names of people who may have been seen to have been involved in any questionable dealings and practices,” Weir said.
Although the FSCA has found no evidence on insider trading up to now, it said accounts where R46m worth of shares were traded would continue to be investigated and a press update will be issued upon finalisation of the investigation.
Nesan Nair, a senior portfolio manager at Sasfin Securities, said possibly a class action could bring about relief for shareholders. “I am not sure this will provide any relief. It is only really the class action suit in Holland that is still pending that has any hope of providing relief, but even that is a long shot,” Nair said.
Dutch investor group VEB was given a go-ahead to sue Steinhoff in Holland last year to recoup billions of rands on behalf of shareholders. Meanwhile, Steinhoff’s subsidiary Conforama yesterday raised an amount of 316m (R4.98bn) new money to continue with its financial restructuring as the French retailer has been trying to shake off its escalating debt.
In another development, Steinhoff yesterday announced that Alexandre Nodale, deputy chief executive and member of the management board, has stepped down from both roles.