Regulator snoozes as Imperial director sits on undeclared trades for a year
IN A WEEK during which the JSE all-share index fell by 11% in a global stock meltdown, company leaders in South Africa took that as an opportunity to buy shares and augment their portfolios. The R7m in net buys can again be seen as a vote of confidence by directors in corporate SA’s current state and future prospects.
Associated Motor Holdings CE Manuel de Canha has put in excess of R10m of his personal cash into Imperial Holdings stock since October 2007. De Canha’s company is the Imperial group’s vehicle import and distribution business. Declared almost a year after the actual trades, De Canha’s trades came weeks after the company’s preference shares were bought by CE Hubert Brody. Since early September De Canha, Brody and another fellow director have spent around R3m on prefs in terms of the company’s deferred bonus scheme.
It obviously is crystal clear the directors are satisfied the share has seen its worst days, having come down from around R130/share at the time of De Canha’s trades in October 2007 to 6 200c. But the question minority shareholders, investors and regulatory authorities should be asking is why it took De Canha – rather, Imperial – a whole year to report millions of rand in share trades by one of its executive directors.
Requirements at the JSE prescribe that directors should inform the company within 24 hours of trading in its shares, according to JSE issuer services division GM Doug Doel. Again, within 24 hours of the company being made aware of the transaction it must declare the trades to the market, something that clearly didn’t happen in the case of De Canha and Imperial.
“That would be a contravention of the listings requirements unless they have a good reason for not announcing the transactions in time,” says Doel, responding hypothetically without seeing the trades in question. He says an alleged offence such as that would fall under the listings requirements list of punishments that, depending on the circumstances, would incur private or public censure or even a fine of up to R5m. Again, depending on the circumstances, the company or director – or both – would be liable to pay the fine. “Generally, it would be the company secretary’s duty to report the trades – but the JSE puts the onus on the company,” says Doel.
Finweek couldn’t contact De Canha, as he’s currently overseas and company secretary Ruan Venter is on leave. However, assistant company secretary Jeanette Johnson did confirm the dates of De Canha’s trades but couldn’t shed any light on why the transactions weren’t reported in time.
There was also a fair amount of selling last week. After putting almost R100m in Foschini’s shares since March, non-executive director Mike Lewis disposed of just under 900 000 shares for R37m (4152c/share) while Truworths merchandise planning director Doug Dare sold R6,8m worth of shares in the retailer. Lewis bought his shares for an average 3600c/share while Truworths had traded below the 2800c/share level since January before suddenly spurting up to 3250c/share last week.
Elsewhere, Grindrod chairman Ivan Clark swapped his single stock futures for ordinary shares. That would have taken some admin burden off Clark’s shoulders, as he’d have had to keep a close eye on the margins in this volatile market.
Shipping options away. Ivan Clark