Is Trustco just too good to be true?
It is puzzling that a US firm should invest in the company’s subsidiary and that Trustco’s CEO is not called a related party
Namibian investment company Trustco seems to enjoy some extremely generous patronage from large shareholder Riskowitz Value Fund (RVF), a US-based firm. The Financial Mail has already reported on the eyebrow-raising transaction in which RVF will fork out R1.2bn to buy a 20% stake in unlisted Trustco subsidiary Legal Shield, which houses mainly the company’s insurance and property interests. At the time of the proposed transaction, late last year, the inferred value of Legal Shield was more than the market capitalisation of Trustco, which sparked a huge rally in the share price, albeit at low volumes. The release of a circular detailing the proposed transaction coincides with the Financial Services Board (now the Financial Sector Conduct Authority) naming Trustco in a list of companies being investigated for possible market manipulation. The investigation, interestingly enough, covers trades in Trustco shares from December 2017 to February this year. Between early November and mid-Ja...
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