Takalani Tshivhase will take a leave of absence as an executive director of Pinnacle Holdings following the news this week that he had been arrested for allegedly trying to bribe a top police official to secure a tender.
“In the light of the bringing of the charge, Tshivhase has requested the company, and the company has agreed, to grant [him] leave of absence with immediate effect until the criminal proceedings have been concluded, at which time [his] association with the company can be reviewed,” Pinnacle said in a statement to shareholders on Wednesday evening.
TechCentral broke the news on Tuesday morning of Tshivhase’s arrest. He was arrested by the Hawks on 5 March for allegedly offering a R5m bribe to a lieutenant-general in the South African Police Service’s technology division to secure a lucrative tender.
The scandal has led to a 43% slump in Pinnacle’s share price in the past two days, with R1,5bn being wiped off its market capitalisation.
The company has come under fire for not communicating sufficiently with shareholders, only informing them of what had happened after news broke on TechCentral of Tshivhase’s arrest.
It has also been criticised heavily for allowing directors to sell shares after it became aware of the arrest and the charges against him.
On Wednesday evening, Pinnacle defended the fact that it hadn’t informed shareholders sooner and sought to deflect criticism about directors’ share trades, including the sale of R4m shares last week by Tshivhase.
It said formal charges were only brought against him on Monday and that this was “the first appropriate time” for the company to disclose this information. “Prior to the bringing of the charge, it was a matter of speculation whether any charge would, indeed, be brought,” it said.
On the sale of shares, it said Tshivhase had sought permission to sell them on 27 January when Pinnacle was in a closed period. Permission was granted on 10 March, five days after his arrest.
But, it says, “this was a very small percentage of [his] holdings and was related to the need to fund a specific transaction of a personal nature”.
Pinnacle CEO Arnold Fourie also sold 1,2m shares, through his family trust, but the company says this was a “forced” sale in which the trust had no other option but to sell. — (c) 2014 NewsCentral Media