The market continues to show its displeasure with JSE-listed Pinnacle after one of its directors was arrested and charged with bribing a policeman to secure a lucrative technology contract.
Its shares slid for the second day in a row on the back of the news, losing another 23.67% today to close at R11.45. Yesterday, the stock lost R5 to close at R15 - a 25% decline on its opening price.
The share sell-off means Pinnacle's market capitalisation is now just under R2 billion. Its shares, which are again at a new 52-week low, closed at R20 on Monday, the day before it informed the market of the charges against one of its directors.
The elite police unit, the Hawks, says Takalani Tshivhase - who is charged with bribing a policeman with R5 million in a bid to secure a tender worth R182 million - was representing his company at the time.
Tshivhase is an executive director of the distribution company and this week again appeared in court on a charge of corruption. The matter has been postponed to 24 April for further investigation.
Hawks spokesman, captain Paul Ramaloko, says Tshivhase was representing Pinnacle when he tried to persuade the South African Police Service to buy around 3 000 movement control devices, each worth R64 000.
Tshivhase was trying to persuade the police to take MaxID units off Pinnacle's hands, says Ramaloko. MaxID units are handheld devices used by the police for investigation purposes and store information related to crimes, and are distributed locally by Pinnacle.
The accused was arrested earlier this month at his Kempton Park office, but Pinnacle only informed shareholders three weeks later. ITWeb's attempts to obtain further comment from CEO Arnold Fourie have been fruitless.
Pinnacle announced Tshivhase's charges yesterday in a short statement to shareholders. It did not provide much detail and said it would review the matter as further information becomes available, and inform shareholders accordingly.
The group said in its statement that the alleged bribery took place about 14 months ago, around 16 January last year.
Tshivhase has denied the allegations, according to the statement issued by Pinnacle. "From the evidence thus far available to the company, the company is satisfied that there is no reason to doubt the veracity of Mr Tshivhase's denial of the allegations," it says.
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