EOH, whose share price gyrated wildly on Thursday, has moved to calm jitters among investors. The company issued a statement to “stakeholders” saying it remains “strong, with a great leadership team and strong fundamentals”.
Earlier on Thursday, the technology services company’s share price fell by more than 9%, to a three-low low of R96/share. It later bounced back and was trading down 1.7% at R104.23 at 3.11pm.
EOH’s share price has come under significant pressure in recent days, apparently over a report in Business Report, a newspaper supplement and website in the Independent Group stable, that repeated earlier allegations of corruption involving a contract with welfare agency Sassa.
The article was largely a rehash of allegations in a story written by amaBhungane and published by the Daily Maverick earlier this year. On 18 July, EOH issued a statement refuting the allegations in the Business Report article and in the original amaBhungane piece after its share price tumbled by more than 12% during intraday trading on that day.
However, EOH has continued to trade lower since then. Today’s rout prompted the company to issue another statement to calm investors, who are also jittery following the departure last month of founding CEO Asher Bohbot, who is credited with leading the strong growth of the past 15 years.
“The recent media reports about EOH have been a cause for great concern for us all,” group CEO Zunaid Mayet, who replaced Bohbot on 1 July, said in Thursday’s statement.
Review
“With the assistance of an independent legal firm, we have conducted a review and are satisfied that the insinuations in these reports are false and untrue, and we have repudiated them in the strongest terms,” Mayet continued.
“We are confident that our overall governance, risk and compliance (GRC) framework and processes are robust and strong. As an additional measure, we have nonetheless brought forward the periodic review of our GRC framework, under the leadership of the chairperson of the audit committee.
“I am personally committed to ensuring sound corporate governance, and that we at EOH continue to conduct our business based on the highest ethical standards, while creating value for all our stakeholders,” he concluded. — © 2017 NewsCentral Media
