FSB probes insider trading in Steinhoff, Brait shares

DEALINGS in shares in Steinhoff International and Brait are being investigated by South African regulators as part of an insider trading probe.

Steinhoff stock transactions that took place between September and November were being examined. This was the period leading up to the retailer’s announcement of its R62.8 billion acquisition of Pepkor, the Financial Services Board (FSB) said this week.

Trading in Brait, the investment company that bought British fitness chain Virgin Active in April, is also being probed.

The FSB was investigating “individuals who were privy to price sensitive information and who traded ahead of the announcements”, Solly Keetse, the head of the regulator’s Directorate of Market Abuse (DMA) division, said yesterday. The DMA’s next quarterly meeting will be held in September.

“It should be noted that these investigations are not into the affairs of the companies listed, but into trading of shares on the stock exchange,” the FSB said.

Brait shares gained 2.9 percent on April 14, two days before the £682 million (R13bn) Virgin deal was announced. That was the stock’s biggest daily advance since January 21, according to data. The company, controlled by billionaire Christo Wiese, agreed to buy British retailer New Look for £780m the following month.

Steinhoff did not issue a cautionary statement before the Pepkor deal was announced, a regulatory requirement that serves to inform investors that talks are taking place that could affect the share price. That decision was questioned by Charl Kocks, the principal officer at Ratings Afrika, The Sunday Times reported on November 30.

Steinhoff took advice and was told it was not necessary to issue a statement, chief executive Markus Jooste said in the same report. – Bloomberg