RCL not chickening out
CEO’s shares sold because they have matured and not because of panic
RCL FOOD has played down the sale of shares by its chief executive, Miles Dally, in the past few days as not indicative of panic in the listeriosis-hit consumer goods and milling company.
Stephen Heath, the company’s director of legal and corporate affairs, said the sale was part of a block of shares allocated to Dally in terms of RCL Foods’ share appreciation rights scheme, which had matured.
Heath said Dally had retained a portion of his share allocation and had sold some to pay the taxation on the share allocation and settle other commitments.
“The shares have to be taken up within seven years and are due to expire in the next year. Shares can only be traded when there is not a closed period as is the situation at the moment, so this is a rare opportunity for these trades to take place,” Heath said.
“He continues to hold more than 1.2 million RCL Foods shares, which he has owned for many years.”
On Friday, reports emerged that Dally had sold his shares for a combined amount of R3.17 million.
The reports claimed that Dally had offloaded 175 856 shares in less than two weeks.
Last month RCL, which owns Rainbow Chicken, was hit by a crippling health scandal rooted in the listeriosis outbreak.
The company’s share price took a tumble as it issued a product recall and suspended all production from its entire customer base over the outbreak, incurring losses estimated at nearly R75m.
It said the indirect impact of the outbreak was difficult to determine or quantify, but management estimated the profit impact to be approximately R20m a month.
Its management was actively engaging the government all the time in order to resume operations at the Wolwehoek processing plant.
After some days, Minister of Health Dr Aaron Motsoaledi confirmed ST6 as the cause of South Africa’s listeriosis outbreak.
The group said the minister had also emphasised that Rainbow polony did not contain ST6.
“Even so, Rainbow recalled all polony products in the interest of public safety,” the group said.
Rainbow Viennas, Russians and other ready-to-eat Rainbow products have not been part of the Department of Health’s precautionary recall.
The department concluded that the source of the outbreak of listeriosis was from a production facility in Polokwane, owned by Enterprise.
Wayne McCurrie, a fund manager at Ashburton Investments, said it was normal for directors to cash in on the shares when a share appreciation rights scheme had matured.
“There is nothing wrong when a director sells when the shares have matured,” McCurrie explained.
Dally sold 175 856 shares at a price of R18 a share between March 29 and April 10.
The share price was flat on the JSE on Friday, at R18.99 a share.