Faritec, which liquidated its largest unit in May, is flouting JSE rules as it has not published its annual results for the year to June, despite the requirement that it continue updating shareholders.
Trade in Faritec's shares is suspended, and has been for several months; yet this does not excuse the company from reporting its figures in accordance with the bourse's rules. Faritec last published figures in March, when it released its results for the half-year to December.
Faritec's year-end was in June, and those figures should have been published by the end of September, and the company is required to publish these by the end of this month.
However, it is not clear who is responsible for updating shareholders as liquidators were appointed to oversee the collapse of its largest unit, Faritec Enterprise Solutions. As a result, the company's directors have not been involved with running the company for some months.
ITWeb understands that companies found guilty of breaching the bourse's rules could see directors fined up to R5 million each in their personal capacity. The most recent such fine in the sector happened at the end of last year when Huge Group directors James Herbst and Anton Potgieter were each fined R5 million for dealing in the company's shares without telling shareholders.
Andre Visser, the JSE's GM of issuer services, says companies are still required to comply with the bourse's listings requirements even if they are suspended.
“The production of financial information is obviously vital in the listed environment and it is for this reason that the implications for not doing it is spelt out very clearly in the listings requirements,” he says.
Visser says if companies don't produce financial information then the rules state very clearly that the JSE will suspend the company and may even consider termination. The JSE requires companies to publish results within three months of the end of the period.
Who to blame?
However, Faritec's listing is complicated by the fact that the company's largest unit is in liquidation and it is not clear who is in charge of the entity at the moment.
In May, the company announced its attempts to raise a much-needed R60 million to cover operating expenses and implement a turnaround strategy had failed. It filed for liquidation of its Enterprise Solutions division after its efforts to raise rescue funding and swap shares for cash failed.
Enterprise Solutions was the company's biggest revenue-spinner, as it accounted for R678 million of Faritec's subsidiaries' revenue for the year to June. Faritec turned over R731 million during that year.
Faritec still has other operating entities such as ICP, or Inter-Company Processes, which turned over R9.3 million; Farimed, which made R10 000; and its e-business group, which accounted for R52 million in revenue in the last financial year.
In June, these entities were still running, albeit with a handful of staff. At the time, CEO Fanie van Rensburg said the liquidator would shortly announce whether these operating units would be affected by Enterprise Solutions' liquidation.
Liquidator Antrust has yet to respond to repeated requests for comment on the company's status. ITWeb has tried to get comment from the liquidator since September, but e-mails have not been answered and messages not returned.
Van Rensburg says he is not involved with the company at all, and has not been for several months. As a result, it is not clear which party is responsible for making sure shareholders are updated on the company's financial situation, and the liquidation process.
The Companies and Intellectual Property Registration Office still lists the company as being “in business” and lists several directors, including Van Rensburg, Arvind Gupta, Daniel McMahon and Noluphumzo Noxaka.
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