The Financial Services Board’s (FSB’s) insider trading investigation into Times Media Group (TMG) is far from complete as the directorate of market abuse is still combing through information that might shed light on share trades that may have violated rules that prohibit directors and officers of a JSE-listed company from transacting in a stock during a company’s closed period.
The FSB said yesterday that the investigation of TMG was still under way, about four months after Business Report revealed that the publisher of the Sunday Times and Business Day was subject to two parallel investigations by the FSB and the JSE’s investigation unit for possible breach of the market’s rules.
According to the FSB, the violations in question carry a maximum penalty of 10 years’ imprisonment.
At the centre of the probe is how Caxton and CTP Publishers & Printers liquidated its stake in TMG by selling its remaining shares to private equity firm Blackstar Group, the second-biggest shareholder in TMG, during its closed period.
It is still unclear whether Andrew Bonamour, the chief executive of TMG, is being investigated. Lesego Mashigo, the media relations manager at the FSB, said the financial regulator did not disclose the identity of individuals being investigated for insider trading unless they had been found guilty by the FSB’s enforcement committee.
But individuals found guilty of insider trading might be fined more than R50 million or face jail time of up to 10 years or both, the FSB said.
Explaining the history and dynamics of insider trading, Mashigo said that if someone had been found guilty of insider trading for infringements that occurred prior to June 3, 2013, the maximum administrative penalty for insider trading was relative to the profit made or loss avoided, plus a penalty of three times the profit made or loss avoided plus interest, commission and the cost of bringing a suit to fruition.
Highlighting the stakes for breaches that took place after June 3, 2013, he said the maximum administrative penalty for insider trading was the profit made or the loss avoided plus a penalty of up to R1m and three times the profit made or loss avoided including interest, commission and the cost of suit.
“All releases relating to an investigation only names the relevant security, the investigated period, and the possible offence. It will never name who is being investigated or not being investigated for insider trading. Only if an individual is found guilty by the enforcement committee, would the individual’s name, the contravention and the penalty be published by the enforcement committee, which is like a court,” Mashigo said.
TMG is a competitor to Independent Newspapers.