Pinnacle bribery scandal digs deeper: report

An alleged R5 million bribe to secure a R1.6 billion tender with the SAPS may not have been the first for Pinnacle executive director, Takalani Tshivhase, the Sunday Times reports.

The South African Police Service (SAPS) said on Monday (24 March) that Pinnacle Holdings executive director, Takalani Tshivhase had been arrested on 5 March 2014 on charges of bribery.

Tshivhase stands accused of offering Lieutenant-General Bonginkosi Ngubane R5 million to secure a R1.6 billion tender for Pinnacle.

According to Ngubane’s testimony quoted in the paper, Tshivase told the lieutenant that if he allowed “certain things to happen”, it would be financially beneficial for him.

“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,” Ngubane said.

Additionally, Tshivhase also offered to allow Ngubane to use his house in George over December, if he wanted to, the paper reported.

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

Ngubane claimed that processes with previous SAPS tender awards to Pinnacle (by his predecessor) seemed improper, with no competitive bid process, and the equipment costing almost double the normal price.

Tshivhase has denied all allegations.

News on Tshivhase’s arrest sent the company’s stock plummeting over 40% – raising a few eyebrows at the timeous selling of shares by some of the company’s executives just weeks before the SENS announcement about the arrest.

Trade timeline

Tshivhase was arrested on 5 March 2014. The SAPS announced the arrest on 24 March, followed by Pinnacle’s SENS announcement on 25 March.

  • On 14 March, 2014, Pinnacle CEO, Arnold Fourie disposed of 1,200,000 shares at a price of R19.17, totalling R23 million.
  • Also on 14 March, Executive director George Wiehahn sold 80,000 shares, totalling over R1.6 million, followed by 53 trades totalling 161,518 shares at a value of R2.7 million on Tuesday (25 March).
  • Then, on 19 March, 2014, Tshivhase completed three sale trades totalling 200,000 shares at a share value of R20.00, totaling R4 million.
  • On 27 March, Louis Fourie, executive director of a major subsidiary of Pinnacle, also disposed of 160,000 shares (at R12.49), totalling R2 million.

In an interview on BusinessDay TV, Fourie rejected any form of insider trading by any of its executives.

  • On 28 March, Fourie, through the Arnold Fourie Family Trust, purchased 1 million shares in the company at R13.58, worth a total value of R13.2 million.

Both the JSE and the Financal Services Board (FSB) have launched formal investigations into the matter.

The case has been postponed until July.

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Pinnacle bribery scandal digs deeper: report