The JSE has publicly censured Invicta Holdings, the industrial conglomerate controlled by retail tycoon Christo Wiese, for breaching regulations around the repurchase of shares on the open market.
The issue was highlighted by the Financial Mail in its Cover Story "The trouble with Invicta", after the company raised a reportable irregularity in its financial statements.
The transaction that caused all the trouble — according to a JSE notice — dated back to November 30 last year, when Invicta subsidiary Humulani Marketing acquired 1.88m shares from executive directors Charles Walters and Arnold Goldstone. The transactions were collectively worth nearly R100m.
Though the shares were acquired as part of a shareholder-approved general repurchase authority, the JSE said a "prior understanding or arrangement" between Humulani and the directors existed. This is contrary to its listing requirements.
The JSE says the repurchase from directors requires shareholder approval through a special resolution.
The JSE, however, did not levy a fine on the two Invicta directors.
Wiese had previously dismissed the Financial Mail’s coverage on the reportable irregularity as "making a mountain out of a molehill".
This week Invicta reiterated that the company notified the JSE and auditors Deloitte immediately on becoming aware of the breach.
Vunani Securities analyst Anthony Clark says the censure is unfortunate, given that Wiese had maintained the company’s innocence. "After an unblemished track record of nearly 30 years, to get a slap on the wrist by the JSE won’t go down well at Invicta."