Dimension Data`s Singapore-listed subsidiary, Datacraft Asia, has seen its share price plunge as concerns mount over a probe by Singapore`s commercial affairs department.
The department said at the end of last week it had launched an investigation relating to Datacraft Asia. While it has not confirmed the nature of the probe, talk in the market is that it centres on insider trading.
The allegations that certain Datacraft directors were involved in insider trading are about a year old, but it emerged only on Thursday that the department was investigating.
Datacraft Asia, which lost 17.9% last week, closed at $0.84 on the Singapore exchange yesterday. This was 8.7% or $0.08 down on Friday`s close.
The share was down another $0.025 or 3% by midmorning, South African time.
The company`s share was suspended at its own request on Thursday after being asked by the commercial affairs department to provide information. It requested later in the day that the suspension be lifted.
When trading resumed on Friday, the share lost 11.5%.
The Singapore Stock Exchange investigated Datacraft previously and privately reprimanded it in May for failing to make an appropriate disclosure in relation to accounts receivables provisions.
This related to a company investigation into an accounts receivable situation in China, where Datacraft suspected impropriety in the non-payment of certain debts.
The exchange told Datacraft that an announcement in April, stating that a further increase in accounts receivable provisions could not yet be quantified, was inaccurate.
It said in a letter to Datacraft: "At the time the statement was made, the board was aware that the group was making an estimated US$4.8 million provision in the second half-year, so that together with the existing provision of US$2.9 million and the additional provision of US$2.2 million announced in the interim results, it would build up provisions to $10 million for the year ending 30 June 2002."
Dimension Data`s share lost 5% or 22c to close at 413c on the JSE yesterday. The fall follows five consecutive gains. By midmorning today it was trading 12c or 2.91% up at 425c.
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