Christo Wiese could be in hot water again with the JSE
The local bourse has reopened a 2016 investigation that resulted in it receiving a public censure at the time
Less than a month after it settled a hefty R750m tax bill, industrial holding company Invicta, in which Christo Wiese is a major shareholder, could be in hot water again with the JSE.
In another blow for Invicta, whose subsidiaries include the distributors of capital equipment, spare parts and engineering consumables in Southern Africa, the JSE has reopened a 2016 investigation that resulted in it receiving a public censure at the time.
News of the JSE probe sent Invicta’s share price down 8.57% to R32 on Tuesday, and adds to a difficult year for Wiese. The billionaire businessman is also a major shareholder in Steinhoff, which is under investigation by various authorities in SA and Europe following revelations of accounting fraud in December 2017, which wiped out more than R190bn of its market value.
Wiese, who stepped down as Steinhoff chair a week after the allegations came to light, is suing the furniture retailer for R59bn in damages.
The JSE censured Invicta two years ago because two of its CEOs — incumbent Arnold Goldstone and former CEO Charles Walters, who now heads Assore — had sold shares to Invicta’s subsidiary, Humulani Marketing, without getting the required shareholder approval.
Invicta said the JSE had received information alleging that the company had not fully and accurately disclosed all the relevant facts to the stock exchange during the course of the JSE’s 2016 investigation.
According to the allegations, Invicta had failed to act despite the issue having been raised with members of the company’s audit committee.
The 2016 censure did not include a penalty or a fine.
The JSE on Tuesday confirmed that it was investigating Invicta again. "The allegations, together with the expected responses and any other information brought to the JSE’s attention, will be considered to identify potential breaches of the listing requirements and necessary action," it said.
The JSE, however, did not respond to specific questions on the matter, citing the Financial Markets Act, which prohibits it from disclosing information obtained "during the exercise of our regulatory duties".
When contacted for comment, Invicta referred questions to Wiese’s office, which did not immediately respond.
Wiese serves as chair of Invicta, while his son Jacob is a nonexecutive director.
Invicta has denied wrongdoing and said it informed the JSE and its auditors, Deloitte & Touche, as soon as it had become aware it had breached the stock exchange’s rules. "The relevant transactions were cancelled and the company reimbursed with each and every cost related to the matter, including all transaction costs, interest and legal fees, thus placing the company back in the position it was in before the transactions occurred," Invicta said.
The JSE investigation comes a few weeks after Invicta informed shareholders of its settlement with the SA Revenue Service. In terms of the agreement, Invicta has to pay R750m in the next four years, with the first payment of R300m due before the end of October.
The payment stems from a dispute around a complicated empowerment structure that was put in place about a decade ago, and that Invicta previously insisted was tax compliant.