Huge Group CEO James Herbst and former chairman Anton Potgieter have had fines of R5m levied on each of them by the JSE reduced to R3m following a contestation of the bourse’s decision at the Appeal Board of the Financial Services Board.
In November 2009, the JSE imposed the fines after it found that the telecommunications company’s acquisition of futures contracts, called single-stock futures, from Herbst and Potgieter constituted a “related-party transaction”.
The Financial Services Board’s Appeal Board has now set aside a finding by the JSE that Huge Group acted contrary to the provisions of the Companies Act and that Huge, as well as Potgieter and Herbst, breached section 5.69 of the JSE’s listing requirements. They did this, the JSE said, by way of having Huge conduct a specific repurchase of its securities from related parties.
Instead, the Appeal Board has found that Huge and the two directors breached section 5.69 of the listing requirements, read in conjunction with section 5.82, in that Huge entered into derivative transactions that “might or would result in the repurchase by Huge of its securities in terms of a general authority without complying with section 5.69 in that approval of shareholders in terms of a special resolution of Huge was not given for such transactions”.
“The penalty of R5m imposed on each appellant is set aside and substituted therefore is a fine on each appellant of R3m,” the JSE said on Monday. — (c) 2012 NewsCentral Media
