MGX, Cycad settle dispute

By Iain Scott for MGX Holdings

Johannesburg, 18 Nov 2003

MGX has agreed to settle a dispute with Cycad Financial Holdings, buying its stake in EC-Hold for 140c a share and contributing R500 000 to Cycad`s legal costs.

Subject to certain conditions, including shareholder approval, MGX is to buy Cycad`s 5 million shares in EC-Hold for R7 million.

MGX has itself been in a dispute with the Securities Regulation Panel since the SRP ruled that it had to pay EC-Hold minority shareholders 240c a share instead of the 100c MGX originally offered.

The SRP ruled that the Mandy Rebecca Price Trust and MGX, as concert parties, concluded an affected transaction by acquiring EC-Hold shares before the announcement of MGX`s firm intention to make an offer to EC-Hold minority shareholders.

Cycad has also been at the centre of a spat with EC-Hold, demanding, along with fellow shareholder Peregrine, a forensic audit into deals between MGX and EC-Hold since October 1999. The core issue there is an R11.9 million loan EC-Hold made to MGX.

Cycad says MGX`s purchase of the stake, as well as the R500 000 contribution to legal costs, brings to an end the dispute with MGX in relation to EC-Hold.

The terms of the settlement include a waiver of claims by Cycad against, among others, EC-Hold, Ronnie Price (former MGX chairman) and each of the trustees of the Mandy Rebecca Price Trust in their personal capacities.

"All claims and counterclaims are formally withdrawn," it says.