MTN Zakhele keeps eye on rules
MTN Zakhele and Sasol BEE are the only two empowerment schemes that do not use the over-the-counter trading platform provided by Equity Express. Sasol BEE is the sole counter listed on the JSE’s BEE sector.
MTN Zakhele, which holds 4% of MTN, was granted an exemption by the Financial Services Board (FSB) from the requirement to have a stock exchange licence, and trades on its own platform.
MTN has not disclosed terms of the exemption. But, commenting on the FSB’s moves to tighten up over-thecounter trading this week, MTN Zakhele chairman Thulani Gcabashe said at the scheme’s AGM: “We will ensure that we remain legally compliant and we will respond appropriately to FSB requirements.”
As currently structured, the scheme is due to expire in 2016. This short life span makes it extremely difficult to justify incurring the steep costs associated with obtaining an exchange licence.
MTN Zakhele’s over-thecounter trading got off to an inauspicious start last November when “technical glitches” brought trade to a halt. It took three months to iron out the glitches, causing much frustration among investors who had bought the shares at R20 when the scheme was launched in 2010.
When trading commenced last February, it was priced at R95. It now trades at R121.50, having reached a low of R75 and a high of R144.50 over the past 12 months.
Since inception, just over R635-million in shares traded, of which R529-million was through matching on the MTN Zakhele platform; the rest were off-platform trades.
Gcabashe told the shareholders at last week’s AGM that the scheme made good progress last year. “The more cost-effective funding structure put in place in the year, along with the prospects for a continuation of MTN Group’s sound operational performance, support my confidence for the company in the year ahead.”
MTN Zakhele and MTN are reviewing the future of the scheme when all the lock-ins expire in 2016. “The shareholders will be informed as soon as the review has been completed,” said Gcabashe.