VenFin trade raises suspicion

By Iain Scott, ITWeb group consulting editor

Johannesburg, 31 May 2006

Trade in VenFin shares ahead of Vodafone`s offer to buy the group last year has come under the scrutiny of the Directorate of Market Abuse (DMA).

The DMA replaced the former Insider Trading Directorate when the Insider Trading Act was incorporated into the Securities Services Act in February last year.

The DMA investigates cases of insider trading, prohibited trading practices (market manipulation) and false, misleading or deceptive statements (false reporting) made in respect of listed securities.

The suspicious trades in VenFin shares took place between 26 October and 3 November last year.

VenFin issued a detailed cautionary announcement on 3 November, stating UK cellular network operator Vodafone had submitted a proposal to acquire the investment group.

The deal saw all of VenFin`s assets, except a 15% shareholding in local cellular operator Vodacom, sold into a newly created company. This resulted in Vodafone and Telkom each owning 50% of Vodacom.

The offer closed on 17 February and VenFin was delisted from the JSE last month.

The DMA is investigating 17 cases of suspicious share trade. IT shares under scrutiny are CS Holdings (April 2004), Omega Alpha International Info Technology Holdings (March to May 2001), Sempres International Technology Holdings (May 2001) and Spescom (January 2005).