free money?
How might share manipulation have helped Resilient?
A major portion of Resilient’s distributable earnings didn’t come from the underlying property rentals, but from other less reliable sources
So what could Resilient have gained had it, as critics claim (and which it denies), put in place a murky plan to manipulate share prices? To understand that we need an idea of how property companies work. Up until the end of last year the shares of Resilient companies traded on the JSE above their net asset value (NAV) — a premium that was unique among property firms. In general, a property company’s NAV should be roughly equal to the value of its properties minus outstanding debt. But in the case of Resilient, investors were willing to pay more for its shares than simply its NAV because those companies were able to grow their distributions (similar to dividends) faster than their peers. Resilient and other listed property companies on the JSE are classified as real estate investment trusts, which gives them tax benefits such as paying out the majority of earnings without being taxed. Earnings that can be paid out are defined according to industry guidelines and are referred to as "...
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