MGX Holdings is sticking to its guns in its continuing face-off with the JSE`s Securities Regulation Panel (SRP) after the panel`s executive committee ruled that EC-Hold`s minority shareholders should be offered R2.35 for their EC-Hold shares, rather than the R1.00 offer MGX extended.
The SRP`s executive committee previously ruled that the Mandy Rebecca Price Trust and MGX, as concert parties, concluded what it terms "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.
In a previous interview with ITWeb, MGX CEO Chris Hills vowed he would not be bullied into changing the company`s stance on the offer, saying it was fair, and should the SRP wish to take the matter further, his company would defend any action in court.
Investors were notified today that the SRP had reached a decision on the share price and MGX advised investors it would be defending the ruling and had already noted an appeal on the ruling.
"MGX continues to maintain that it has not breached the regulations of the Securities Regulation Code on Takeovers and Mergers...Therefore, no offer to EC-Hold shareholders will be made until the conclusion of the appeal process to the Full Panel and any court proceedings that may ensue," explains MGX management in its announcement.
MGX also pointed out to investors that its worst-case scenario announced to investors in June of R45 million has been revised to MGX having less than a R30 million investment in EC-Hold.
Hills` firm stand on the matter is in sharp contrast to other listed IT companies` dealings with the financial regulatory bodies.
In previous insider trading investigations, the Insider Trading Directorate has been content to accept fines without admission of guilt clauses to diffuse investigations. However, Hills has stated that this would not be an option for MGX and stands firm that the company has in no way transgressed.
It remains to be seen whether the SRP will follow through with its ruling.
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