THE Johannesburg Stock Exchange (JSE) has expressed disappointment with Trustco Group Holdings Limited (Trustco) by upholding a censure of the Namibian company.
This is after South Africa’s Financial Services Tribunal (FST) this week rejected a Trustco application to reconsider the initial censure issued during the 2017/18 financial year. The initial public censure was issued for not informing Trustco shareholders about a Huso transaction in 2017.
The transaction involved for a loan advanced to Huso Investments Proprietary by Trustco.
The JSE issues a public censure, which is one of a number of options available to exchange, when a regulated party has contravened or failed to adhere to the provisions of the listings requirements, in accordance with the provisions of South Africa’s Financial Markets Act (FMA).
According to the JSE, each censure case is assessed and decided on merits, but there are certain general guidelines and factors the JSE may consider when reaching a decision in respect of a censure.
These factors include but are not limited to whether the censured entity is a first-time offender, the general compliance history of the offender, offenders who previously received a censure for a separate investigation and if the alleged transgression involves a fundamental breach of JSE listings requirements.
In a statement issued on Tuesday, Trustco acknowledged the public censure related to the Huso transaction. As part of investigation into the monitoring in respect of the Huso transaction, the JSE found that Trustco should have addressed the need for the publication of a supplementary announcement regarding the Huso transaction after the relevant shareholders’ meeting was held. This relates to the Huso transactions approved by shareholders on 13 June 2017.
The JSE imposed a public censure on Trustco for its failure to publish a supplementary announcement during the 2017/2018 financial year. Trustco then lodged a reconsideration application of the JSE’s decision for a public censure to the FST, citing the Financial Sector Regulation Act, Act 9 of 2017. On 2 October 2023 the FST dismissed Trustco’s application for reconsideration, with no order to cost.
However, Trustco remains adamant that it acted in good faith throughout the process by adhering to prescribed JSE listings requirements regarding SENS (Stock Exchange News Service) announcements and disclosure to its shareholders, by obtaining necessary approvals from accredited independent JSE auditors and International Financial Reporting Standards
(IFRS) experts and receiving approval on its circulars from the JSE itself during the process. As such Trustco stated it remains committed to the highest standards of corporate governance, transparency, fair dealings and interactions with all stakeholders.
“The board takes its oversight duties seriously and will continue to exercise independent judgement in the best interests of the company and shareholders,” read the statement issued by Trustco spokesperson, Neville Basson.
In the statement, Trustco’s group managing director, Quinton van Rooyen, remarked: “It is regrettable that we’ve reached a point where it’s presumed that regulators are infallible. It is essential for justice to be not only done but also seen to be done. Furthermore, it’s evident from the track record of companies subject to censure that the JSE exercises its rules with complete discretion, and the FST has never found against the JSE, indicating that the JSE is not capable of making a wrong decision”.
The statement added that although Trustco is disappointed by the censure, it accepts the ruling of the FST upholding the JSE’s decision, noting “Trustco will always abide by the rule of law”.
The statement continued that Trustco, with a well-established history as a publicly traded company, remains unaffected by the recent ruling, which it noted has had no impact on its investment portfolio or growth strategy.
“Notably, Trustco’s share price has shown exceptional performance this year, nearly doubling in value, representing an impressive gain of 95.1%,” the statement added. -ebrandt@nepc.com.na