JSE censures Trustco

The JSE (Johannesburg Stock Exchange) has publicly censured Trustco Group Holdings for its failure to promptly inform shareholders about the effects of a change in the terms of a loan advanced to Huso Investments Proprietary by Trustco's Chief Executive Officer and shareholder, Quinton van Rooyen.

The action comes after the change in the loan terms for Huso was identified in 2020 by the JSE's Pro-Active Monitoring Unit during their review of Trustco's interim financial statements for the six months ending on September 30, 2018, and the annual financial statements for the year ending on March 31, 2019.

According to the JSE, it was only after the transaction, in which Trustco acquired Huso from Van Rooyen, became effective on September 4, 2018, and was disclosed in the Company's interim financial statements, that shareholders and the market became aware of the impact of Huso's change in financial position on the Trustco group.

"The provisions of paragraph 9.19(b) of the JSE Listings Requirements require that when a significant change to a matter or transaction arises and is identified after the relevant shareholders' meeting, a supplementary announcement is necessary if such information falls within the scope of paragraph 3.4(a) of the Listings Requirements, i.e., if it constitutes price-sensitive information. The Company did not disclose to shareholders and the market that the financial position of the entity it was acquiring had significantly changed from what was contained in the circular that shareholders had previously approved. Such a significant change in the underlying financial position of the entity to be acquired was specific, precise, and had the potential to influence the economic decisions of shareholders and investors," the JSE stated on Monday.

The stock exchange found that "issuers have a duty to always comply with the Listings Requirements. Compliance with the Listings Requirements is aimed at, but not limited to, investor protection and investor confidence. To support the objective of transparency and a trusted marketplace, issuers are obligated to inform the market if there has been a significant change to a matter or transaction after the relevant shareholders' meeting that is price-sensitive. Accordingly, the JSE found the Company to be in breach of paragraph 9.19(b) in conjunction with 3.4(a) of the Listings Requirements."

Trustco ,however, on Tuesday maintained that it acted in good faith and adhered to the prescribed JSE Listings Requirements regarding SENS announcements and disclosure to its shareholders.

“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,” Van Rooyen said.

The company said, “although Trustco is disappointed by the censure, it accepts the ruling of the Financial Services Tribunal upholding the JSE's decision. Trustco will always abide by the rule of law.”

Trustco is a Namibia-headquartered company with operations in insurance, investments, resources, banking, and finance.

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Last modified on Wednesday, 04 October 2023 12:18

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