Afgri gets it wrong
Farming business makes a meal of disclosures
THE JSE’S RULES concerning the disclosure of directors’ dealings have been in place for six years, with just a few ongoing tweaks to the regulations. So there’s really very little excuse for getting it wrong. And that brings us to agribusiness Afgri, which has made a horrible meal of its disclosures, probably getting itself into a pickle with the JSE.
Last week the company announced on the Stock Exchange News Service (Sens) that MD Jeff Wright had sold shares “as a consequence of the accrual and implementation of the deferred right to sell shares (options allocated and exercised on 1 November 2003 at R5,01 and 1 June 2005 at R4,73; market value on those dates) in terms of the company’s share incentive scheme.”
The company didn’t disclose the number of shares exercised at each price, making it impossible to calculate what Wright’s profit was on the transaction.
So we went through the Sens archive looking for the two options transactions quoted by Afgri. We couldn’t find them. Moreover, we couldn’t find any transaction by Afgri that specifically noted the nature of the transaction as an exercise of options.
So we called the company to find out what was going on. After much backwarding and forwarding while the company checked its records, Afgri was able to show that it had disclosed the transactions – but on completely different dates to those declared in the latest Sens announcement.
Apart from the erroneous dates, Afgri was also using irregular and arbitrary terminology to describe dealings by its directors. In particular, the company took the phrase “grant and acceptance of options” to mean that the director had exercised options.
No, it doesn’t. Of course, the real wonder is that those erroneous disclosures got past Afgri’s sponsors, RMB. The entire role of corporate advisers and sponsoring brokers is to make sure that the companies they advise get it right.
With that attitude, Afgri and its advisers must be prepared to take whatever flak comes their way.