Picture: ISTOCK
Picture: ISTOCK

There was a mixed response on Wednesday to an independent review that exonerated Resilient of any wrongdoing, with concern raised about the scope and depth of the investigation.

Some of its critics said the review, led by former auditor-general Shauket Fakie, was too limited in scope.

Critics said the review’s findings lacked detail as to how Resilient had passed numerous governance tests.

The property company’s share price plunged more than 50% earlier in 2018 after some highly critical reports about it were released.

Resilient’s directors, including CEO Des de Beer and financial director Nick Hanekom, have been accused of share price manipulation to grow the real-estate investment trust’s market capitalisation and of contravening governance.

The reports also suggested insider trading had taken place at Resilient.

36One Asset Management CEO Cy Jacobs said Fakie did not investigate transactions by parties linked to Resilient and its associates Fortress, Nepi Rockcastle and Greenbay Properties.

“No explanation is given why these companies trade at such premiums to net asset value and are an aberration in comparison to their peers locally and internationally,” said Jacobs.

“We have not changed our views.... We are confident that the truth will come out.”

36One Asset Management has been highly critical of Resilient. Its damning report was leaked early in 2018.

The research report concluded that the premium valuation of Resilient Group’s shares arose from “insider-directed and insider-related transactions in group companies’ shares to deliberately inflate share prices and volumes traded”.

These tactics would enable Resilient to keep its stock in the JSE’s top 40 index, which added to its value and let it benefit from index tracking funds, which would be forced buyers of the stock.

Sell-side independent research house Arqaam Capital’s report also raised concern. Associate director Kyle Rollinson said Fakie’s review was a “step in the right direction” even if it left “some boxes unticked”.

“Nobody got in touch with Arqaam. I know they worked on the report for six weeks but there was no need for such a short timeframe for an independent review, especially when so many parties needed to be involved,” Rollinson said. He said Arqaam would release another report into Resilient in the near future.

Shareholders are awaiting the results of two other reviews into Resilient — one by the JSE and another by the Financial Sector Conduct Authority.

Nesi Chetty, a fund manager at Momentum Investments, said he did not expect the reviews to find any wrongdoing at Resilient. “Faith is being restored in Resilient and the listed property sector overall,” he said.

Resilient’s share price is up about 30% so far in April.

Rollinson said that even though Resilient’s share price closed at R65.27 on Wednesday, he did not foresee it recovering beyond R100.

At its peak on December 29 2017, it was priced at R151.16.