New bribe claims hit Pinnacle

FSB opens insider trading probe after directors dump shares

COURT documents filed this week revealed alarming details of how Pinnacle Technologies executive Takalani Tshivhase tried in many ways to score a R1.6-billion contract before allegedly offering a R5-million bribe.

This comes as the Financial Services Board confirmed it is launching a formal investigation into possible insider trading by Pinnacle’s directors.

Tshivhase allegedly met police Lieutenant-General Bonginkosi Ngubane at the Palazzo Hotel at Montecasino, Johannesburg, on January 16 last year, and offered him R5-million to ensure Pinnacle won a R1.6-billion tender to provide police with Max ID terminals.

These Max ID mobile terminals match fingerprint data with a police database of suspects, and can also be used to see if vehicles are stolen.

Tshivhase was arrested on March 5 on bribery charges. But before Pinnacle revealed details of his arrest to the market, Tshivhase sold shares worth R4-million, Pinnacle CEO Arnold Fourie sold shares worth R23-million, and executive director George Wiehan sold stock worth R2.7-million.

Only then, after Techcentral broke

I was quite shocked and my heart just sank as it confirmed to me that this was what Tshivhase had been doing

the news, did Pinnacle inform the market, which led to the company’s stock losing 43% of its value in two days.

Solly Keetse, the FSB’s head of market abuse, said the regulator received a report from the JSE this week on the Pinnacle matter, and lodged the case for formal investigation. JSE listing rules state clearly that a director may not deal in a company’s shares “at any time when he is in possession of unpublished price-sensitive information”.

Pinnacle has argued that its lawyers said it needed to disclose details of the case only once “a charge was formally made” against Tshivhase.

But documents filed in the Pretoria Specialised Commercial Crimes Court this week, and obtained by Business Times, say Tshivhase offered the bribe only after Ngubane spurned earlier, more subtle bids to butter him up.

In a sworn statement dated last November, Ngubane said that Tshivhase met him at the police headquarters to discuss the tender.

“[Tshivhase] said he had a house in George, and if I wanted to stay there during the December period I was welcome to use it. I did not accept Tshivhase’s offer,” he said.

In the statement, Ngubane also detailed the crucial meeting at the Palazzo Hotel on January 16, where Tshivhase allegedly offered the bribe.

Over dinner, Tshivhase had first complained to him that “in the past, around this time of year, he normally got a lot of business from the SA Police Service, but that nothing was forthcoming”.

Ngubane’s statement said: “[Tshivhase said that] if I allowed certain things to happen, it will be financially beneficial to me. Tshivhase then went on and offered me an amount of R5-million if I ensured the SA Police Service procured the remaining 3 000 Max ID terminals from Pinnacle through him.

“I was quite shocked, and my heart just sank as it confirmed to me that this was what Tshivhase had been doing successfully. I went on listening, and did not say anything about his offer.”

Ngubane said Tshivhase “had some wine during dinner, but he was quite sober and in his sound mind and senses when he made this offer to me”.

Two days later, Ngubane met police commissioner Riah Phiyega, and reported the bribe. “We all agreed that I report [the offer] to the Hawks.”

Though Tshivhase has not yet filed any defence to the charges, he said the claims made were nonsense.

But the court documents also raise serious questions over the previous tender Pinnacle won to supply 1 000 Max ID terminals to the police.

That tender was awarded by Ngubane’s predecessor, but Ngubane said he was unhappy about this as the process seemed “improper”. “There was also no competitive bid process relating to the procurement of the Max ID terminals, and SAPS were overcharged because we paid more than double” what Pinnacle had paid, he said.

Ngubane said another technology firm showed him an invoice showing they had bought a Max ID terminal for R23 000 when the police paid R54 000 for the units.

Fourie said the unit bought by the firm was secondhand and strippeddown and therefore cheaper.

This week, Tshivhase appeared in court, but his lawyers asked for more time to prepare a defence.

Magistrate Nina Setshogoe postponed the case until July 2, but said no further extensions would be granted.

Outside court, a source close to Tshivhase said the prosecution “had no case”. “Why did they take so long to report this case? Why did we only hear about this more than a year later?” he asked.

Instead, said the source, the policeman who made claims against Tshivhase had himself favoured one of Pinnacle’s rivals for the tender.

Hawks spokesman Paul Ramoloko dismissed this claim immediately, saying the case wouldn’t be in court if “there was nothing there”.

Ramoloko said the court dockets were a mere framework of what the prosecution had in terms of evidence.