Pinnacle Holding CEO, Arnold Fourie has rejected calls of insider trading, following recent share trading activity after the arrest of executive director, Takalani Tshivhase.<\/p>\n
Shares in Pinnacle dropped 24% in trade on the JSE on Wednesday, to R11.45, having wiped off as much as 25% in market value on Tuesday.<\/p>\n
The South African Police Service (SAPS) announced on Monday (24 March) that Pinnacle Holdings executive director, Takalani Tshivhase had been arrested on 5 March 2014 on charges of bribery.<\/p>\n
Tshivhase\u00a0allegedly offered a lieutenant general in the technology management environment of the SAPS R5 million to secure a multimillion rand tender for his company.<\/p>\n
In response to the allegations, Pinnacle said that \u201cMr Tshivhase denies all allegations of attempted bribery, and will defend the charges.\u201d<\/p>\n
According to SENS announcements,\u00a0Tshivhase and Pinnacle Holdings CEO, Arnold Fourie both disposed of shareholding in the company between the former\u2019s arrest (5 March) and the SAPS media release on the matter (24 March):<\/p>\n
On 14 March, 2014, Fourie disposed of 1,200,000 shares<\/a><\/strong> at a price of R19.17, totalling R23 million.<\/p>\n Also on 14 March, Executive director George Wiehahn sold 80,000 shares<\/a><\/strong>, totalling over R1.6 million.<\/p>\n Then, on 19 March, 2014,\u00a0Tshivhase completed three sale trades totaling 200,000 shares<\/a><\/strong> at a share value of R20.00, totaling R4 million.<\/p>\n In an interview on BusinessDay TV, Fourie rejected any insider trading.<\/p>\n Defending his own trading activity, he said: “Firstly, talking about my options, I entered the zero cost\u00a0collar on December 2012, which the corresponding bank had the right to call the shares on me, they\u2019ve been calling shares on me since December of last year.”<\/p>\n He said that the bank exercised its option again in the last month. \u201cIt was not my decision. It\u2019s a deal that was done in December 2012. It’s certainly not selling of shares. It’s options that have been called on me from the corresponding bank.”<\/p>\n Fourie said that while Tshivhase did sell 200,000 shares, he possessed a document, which he sent to himself and the company chair on the 27 January, \u201csaying that he is aware we are in a closed period\u2026and he would apply in advance for permission to sell 200,000 shares after the expiry of the closed period.”<\/p>\n “So this was not something that he rushed into\u2026this is something that he planned in January already, and executed the sale now.\u201d<\/p>\n Fourie reiterated that Pinnacle backed its executive.<\/p>\n \u201cWe have sat down with the executive in question\u2026we’ve asked him to relay his version of events. He does not deny that he did have a meeting with the relevant person, but he said obviously that the charge laid against him are not true and he is going to defend that.”<\/p>\n Fourie said that no contract was executed, no product was supplied, “and that\u2019s the information we have at the moment”.<\/p>\n Looking ahead, the chief executive said that the investigation \u201cis out of our hands\u201d, and will run its course in court.<\/p>\n \u201cFrom a company point of view, the best we can do is focus on the business,\u201d Fourie said.<\/p>\n On a charge that the Pinnacle was slow to communicate with shareholders, Fourie said that following arrest, the company sought as much information as it could, to understand the nature and allegations against its executive.<\/p>\n He said that the company was not in any position to communicate until Monday, after Tshivhase had appeared in court.<\/p>\n In a SENS announcement late on Wednesday afternoon, Pinnacle said:<\/p>\n The company, acting on legal advice, made the announcement immediately that a charge was formally made against Mr Tshivhase. The making of the charge on Monday, 24 March 2014, was the moment at which criminal proceedings were initiated and was the first appropriate time for the Company to report thereon. Prior to the bringing of the charge, it was a matter of speculation whether any charge would, indeed, be brought.<\/p><\/blockquote>\n The position of Mr Tshivhase in the company:<\/p>\n “In the light of the bringing of the charge, Mr Tshivhase has requested the Company, and the company has agreed, to grant Mr Tshivhase leave of absence with immediate effect until the criminal proceedings have been concluded at which time Mr Tshivhase\u00b4s association with the Company can be reviewed,” Pinnacle said.<\/p><\/blockquote>\n Comment on the likely outcome of any prosecution:<\/p>\n “The company has previously noted that on the evidence thus far available to it, it has no reason to doubt the veracity of Mr Tshivhase\u00b4s denial of the allegations of any impropriety. The matter is now sub judice and the Company has been advised that it would not be proper to elaborate further on this aspect of the matter.”<\/p><\/blockquote>\n In his interview with BusinessDay, Fourie admitted that the handling of the situation by Pinnacle could have been better.<\/p>\n “In hindsight, we could have probably done things better,\u201d he said, adding that the company was breaking new ground in this regard.<\/p>\n \u201cWe still believe that we were responsible to understand the full allegation and the nature of these allegations first, before we had to send out the SENS (announcement).\u201d<\/p>\n “As executives we focus on the business, we focus on the profitability and the growth, and we can\u2019t really comment on the share price. Having said that, we don\u2019t believe Pinnacle today is a different company than it was yesterday or last week.\u201d<\/p>\n He said that the sentiment towards the shares, \u201cwe cannot manage, and shareholders will obviously feel whether they want to buy into the company or not.\u201d<\/p>\n JSE probe<\/strong><\/p>\n When asked about the trades, the JSE\u2019s director of Issuer Regulation, John Burke said that the exchange is currently \u201cinvestigating the issue and will be posing some questions to the company.\u201d<\/p>\n \u201cWhenever there is a situation like this we need to see who traded what, and what information was available to them. Upon completion we will hand over the finding to the FSB (Financial Services Board),\u201d JSE spokesman, Peter Redman told BDLive.<\/p>\n A Pinnacle spokesperson told BusinessTech that the company has seen reports about the JSE\u2019s investigation, but had not received any confirmation from within the company that one was underway.<\/p>\n Pinnacle shares crushed on bribery charge<\/a><\/strong><\/p>\n Tech businessman arrested for alleged corruption<\/a><\/strong><\/p>\nMore on Pinnacle<\/h3>\n