The sale of the Vlok family`s Idion shares to Idion rival DataMirror has been frozen until next Friday in terms of a court order.
The matter centres on Marius Vlok, the father of Idion CEO Nicolaas Vlok, who maintains that he submitted the Idion shares belonging to his wife and younger son, among shares in other companies, to broker DWM for dematerialisation, a position confirmed by DWM.
When a share is dematerialised - converted from paper to electronic form - the holder takes the certificate to his broker. The broker has a central securities depository participant (CSDP) to which those shares are then forwarded.
Once the shares are submitted to a registrar, they are dematerialised after the validity of the physical certificate is verified. The information is loaded into the Strate (the central securities depository) system and the subregister of the CSDP is then updated.
However, after the shares were submitted to transfer secretary Computershare Investor Services, they were forwarded to BOE Merchant Bank with the understanding that they were to be sold to DataMirror, involved in a highly publicised hostile attempt to take control of Idion.
The dispute went to the High Court last night when DWM applied for an urgent interdict to prevent Computershare from transferring the shares and paying Vlok.
DWM CEO Kobus van Wyk says DWM took the issue to court after failing to receive a requested undertaking from Computershare that the transaction would be halted.
He says the court granted an order to halt the transfer of the shares until the next appearance on Friday.
Computershare MD Frik Vermaak has confirmed receipt of a High Court document.
He has maintained that Computershare received instructions to accept Vlok family shares in Idion on behalf of DataMirror.
He adds that because of the sensitive nature of the deal, Computershare contacted a DWM staff member to confirm the transaction and to request the relevant surrender forms.
While Van Wyk says the DWM staffer has signed an affidavit to the contrary, Vermaak maintains that the staff member said she did not have any surrender forms and that "in accordance with the market practice of brokers, in the absence of a surrender form the covering letter which accompanied the shares was sufficient - and that was a cover letter on a DWM letterhead".
"BOE, as the corporate advisor to DataMirror, was advised of the number of shares accepted and asked to confirm that payment should be processed. Aware of the implications of four members of the Vlok family selling their Idion shares, BOE verified the validity of the instruction before proceeding with the procession of the payment."
Van Wyk says that in terms of legislation and JSE requirements, the shares would have to have been accompanied by a surrender form and a process form, both signed by the client. "You cannot do it telephonically," he says.
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