Pinnacle shares leapt 43.65% yesterday, to close off at R14.15, a R4.30 gain on the day after news that charges against its executive Takalani Tshivhase were dropped because of a lack of evidence.
Pinnacle made the announcement at 3.40pm, leading to an immediate gain in the value of its stock. This news comes just five days after the distribution company moved to assuage market fears and stem the sharp decline in its share price.
The listed company says: "Tshivhase has received written notification from the Specialised Commercial Crime Unit of the National Prosecuting Authority of South Africa (SCCU), that after careful consideration of the evidence at their disposal and consultation with, and evaluation of the reliability of all the state witnesses, the SCCU has come to the conclusion that the evidence presented is insufficient to provide a reasonable prospect of a successful prosecution.
"The charges against Mr Tshivhase will accordingly be withdrawn."
Pinnacle has welcomed the decision, adding it backs up its own investigation that there was "no reason to doubt the veracity of Mr Tshivhase's denial of the allegations. After what has been a most trying time for the company, as well as Mr Tshivhase and his family, the board reassures all of its stakeholders that [it] continues to practice the highest standards of corporate governance and transparency."
Market moves
Last Wednesday, the company said it remained focused on day-to-day business operations, and says customers, suppliers and financiers "remain in place and continue to be supportive of the business".
Its share price fell earlier this month after it said its results for the year ended 30 June would reflect a headline earnings per share drop of 15% to 22%, and earnings per share decline of between 13% and 20%.
However, its price had previously been hammered by the news of charges against Tshivhase, allegedly for attempting to bribe a police official with R5 million so the company could win a R182 million contract to supply about 3 000 handheld MaxID devices to the South African Police Service.
News of the charge, released on 25 March, sent Pinnacle's shares into freefall, as they lost 25% on the day from the opening price of R20. On 26 March, its stock continued to slide, losing another 23.67%, to close at R11.45, dropping its market capitalisation to under R2 billion.
Its 52-week low is R7.62, a figure it dropped to on 18 August, although this is nowhere near its all-time low of 25c, seen on 2 July 2004. In December 2008, the stock again dropped, this time to a level of R1.60.
On 27 March, executives started buying up stock in the company. In several separate disclosures to the bourse - the last made on 3 April - directors and associated trusts snapped up more than R20 million-worth of stock.
At the end of June, Pinnacle said it would spend R29 million to buy back 2.1 million of its own stock in a move that will bolster earnings per share 0.58%, because it dilutes the shares in issue. The repurchase was done under a general authority the directors have to buy back as much as 18.76% of its stock.
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