Resilient’s own probe exonerates it of wrongdoing
In a victory for Resilient, an independent review commissioned by the company’s board has exonerated the real estate investment trust of all wrongdoing. However, the group is not out of the woods yet.
It is awaiting the results of reviews by the JSE and Financial Sector Conduct Authority (FSCA), which are considering trades made in Resilient and its associate companies’ shares as well as the conduct of its executives.
The diversified owner of shopping centres and listed securities has faced serious allegations in 2018, including executive misconduct, share price manipulation and insider trading through a series of damning reports. On February 16, the Resilient board announced that it had commissioned an independent review led by former auditor-general Shauket Fakie.
On Tuesday, Fakie released findings after six weeks, saying given the scope of the review and information available to him, he could not connect Resilient to any wrongdoing.
Fakie’s key findings included: “There is no evidence of executive misconduct and/or breaches of applicable governance rules and policies by Resilient, its executives and [BEE schemes] the Siyakha Trusts. There is no evidence of any market manipulation. There is no evidence of any insider trading.”
The findings were supposed to be released on Friday but were delayed to Tuesday so that a director from 36One Asset Management, which wrote a critique of Resilient, could be interviewed. 36One co-founder and CEO Cy Jacobs said that despite the delay, nobody from the firm was interviewed.
Fakie said Jacobs wanted his lawyers present. “We gave Cy Jacobs an opportunity to be interviewed yesterday. Because his lawyer was only going to be available on Thursday, the interview did not take place and we could not delay our report any further. We are still trying to schedule an interview with him for Thursday.”
Interested parties still had the opportunity to present evidence of wrongdoing with a view to
supplementing his report to the board if he considered it necessary. His review considered share activity that covered the 14 months from January 1 2017 to February 28 2018.
He appointed independent advocate Tony Ferreira to assist him. Ferreira, a former senior FSCA forensic specialist, investigated and reported on insider trading for the Directorate of Market Abuse.
The review examined documentation provided by Resilient, its executives and their associates as well as the Siyakha Trusts regarding all their share activity in relevant shares for the review period. Allegations under review derived from reports by 36One, Navigare, Arqaam Capital and Mergence.
Fakie and Ferreira interviewed directors of Java Capital, which was a bookrunner on share placements, Resilient’s external auditors and banks.
Jacobs said the scope of Fakie’s mandate was limited and that 36One had not changed its views. “No explanation is given why these companies trade at such premiums to NAV [net asset value] and are an aberration in comparison to their peers locally and internationally.”
Resilient CEO Des de Beer said he could not comment on the review as Resilient was in a closed period.