Iqbal Survé allegedly involved in share manipulation
Media owner Iqbal Survé is alleged to have deliberately manipulated the share price of a company he had a significant stake in, apparently to avoid repaying a R4.3bn investment financed by government workers’ pensions.
This, according to a Sunday Times report, is among the allegations contained in an affidavit by a Financial Sector Conduct Authority (FSCA) investigator.
Survé and two of his companies – Sekunjalo and financial services provider 3 Laws Capital – are being investigated by the FSCA for allegedly contravening the Financial Management Act.
The contravention, which centres on the over-inflation of the value of shares in AYO Technology Solutions, which is linked to Survé and his businesses, carries a penalty of up to 10 years in prison, a maximum fine of R50m or both.
Sekunjalo has a 92.5% stake in 3 Laws Capital, with the remaining stake owned by Arthur Johnson.
Survé and Johnson are two of the company’s four directors.
The 71-page affidavit of FSCA investigator Alfred Shimati, which was deposed to in October after an 11-month investigation, outlines in detail the alleged share manipulation scam uncovered by the JSE, says the Sunday Times report.
Shaun Davies, market regulation director in the JSE, confirmed it asked the FSCA to investigate the trading in AYO shares.
‘Conducting routine surveillance monitoring, we identified trading activity in AYO shares that we believed required further investigation,’ he said, without saying why the further investigations were needed. However, the report quotes a source as saying the manipulation was done to allegedly stop the PIC recalling its R4.3bn investment.
‘There were problems from the start with the share value. Just look at the trades. The only time a trade was done was when the companies themselves traded the shares. Other than that there was no movement. Simply put, no-one wanted them.’
Last week, Sekunjalo Investment Holdings and 3 Laws Capital launched an application in the Western Cape High Court to overturn the warrant and have the seized items returned. Survé declined to comment on detailed questions, but in court papers he denied the allegations and claimed the raids were unconstitutional, says the Sunday Times report.
In an affidavit submitted to court he claims it was he who alerted the FSCA to the alleged share manipulation, which apparently saw his shares undervalued, via a letter to the regulator written in February, but the FSCA did not appear interested.
In his affidavit, Survé says the warrant violated his and his businesses’ rights to privacy.
Also last week, the PIC announced its application to have Sekunjalo Independent Media liquidated, ‘because of the company’s failure to honour its loan repayment obligations’.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.