Sagarmatha ‘meets terms’
The JSE is adamant that Iqbal Surve’s Sagarmatha Technologies, due to be listed on the exchange this Friday, has met all listings requirements.
The JSE is adamant that Iqbal Surve’s Sagarmatha Technologies, due to be listed on the exchange this Friday, has met all listings requirements.
However, if Sagarmatha failed to stump up a targeted R3bn in capital from investors by Wednesday morning, “there is no listing to proceed with”, said Andre Visser, general manager of market regulation at the JSE. Visser said Sagarmatha Technologies, the listed vehicle into which the unprofitable Sekunjalo Independent Media (SIM) assets will be injected, has in fact received a clean audit opinion, notwithstanding that SIM is technically bankrupt.
While the auditors’ report in Sagarmatha’s prospectus notes that the ability of SIM to continue as a going concern is dependent on the directors procuring funding, among others, Visser said. “They have most definitely satisfied listings requirements.”
Under the JSE’s main board requirements, a company needs to have capital of R50m, audited financial statements of three years and have made a profit before tax of R15m in its latest results. But it also provides for an alternative to the profit.
“What we do in that is increase the capital requirement from R50m to R500m, so we make it much more difficult for those companies who don’t’ have profits to qualify for listing on the JSE,” said Visser.
The JSE is also able to exercise its discretion in granting a listing to a new applicant under its conditions for listing rules.
However, Louis Cockeran, the JSE’s legal counsel, said the exchange was able to exercise its discretion only within the framework of the Financial Markets Act. “No public functionary or regulatory authority may have an unfettered discretion to decide: you comply and you’re in, or you don’t comply and you’re out, and vice versa.
“That discretion must be narrowly interpreted, and at the moment there are no facts or circumstances that would convince us not to grant the listing,” he said.