Results of the investigation by the JSE Limited and the Blue Label Board appointed sub-committee into directors
14 April 2008
Results of the investigation by the JSE Limited and the Blue Label Board appointed sub-committee into directors’ contraventions of the JSE Limited Listing Requirements
Blue Label Telecoms Limited (Blue Label) today announced that following a full JSE Limited (JSE) investigation into share dealings in Blue Label shares by certain directors of The Prepaid Company (Pty) Ltd (TPC) (a major subsidiary of Blue Label), and their spouses, the JSE has found the following:
- Mr Diamond was found to have contravened Rules 3.65, 3.66, 3.71(a) and 3.72 of the Listing Requirements in that he did not obtain clearance from the Blue Label designated Director prior to his dealing in Blue Label shares, did not communicate in writing to his spouse the requirement that she advise him immediately upon trading in shares and did not announce these trades on SENS within the prescribed time period. Mr Diamond was publically censured by the JSE, and a fine of R100,000.00 was imposed (of which R60 000.00 has been conditionally suspended for 12 months).
- Mr Kaplan was found to have contravened Rules 3.71(a) and 3.72 of the Listing Requirements in that he did not communicate in writing to his spouse the requirement that she advise him immediately upon trading in shares. Mr Kaplan was privately censured by the JSE.
- Mr Prosser was found to have contravened Rules 3.65 and 3.66 of the Listing Requirements in that he did not obtain clearance from the Blue Label designated Director prior to purchasing Blue Label shares, and did not announce these trades on SENS within the prescribed time period. Mr Prosser was privately censured by the JSE.
Messrs Diamond, Kaplan and Prosser accept the decision of the JSE.
Mark Levy and Brett Levy, joint CEOs of Blue Label Telecoms commented: “The Board of Directors and executive management team of Blue Label view any contravention of the JSE’s Listing Requirements in a serious light. The company and individuals concerned have co-operated fully with the JSE during its investigation and Blue Label is pleased that these matters have finally been determined.”
In addition to the JSE’s investigation, the Board of Directors of Blue Label today announced that a committee of Blue Label non-executive Directors (the Committee), appointed by the Board and under the chairmanship of Mr Larry Nestadt, carried out its own investigation into the following:
- the conduct of the Directors concerned;
- compliance by all of the members of the Board of TPC with the JSE’s Listing Requirements (“Listing Requirements”) in relation to share dealings; and
- the adequacy of processes in place at Blue Label to ensure compliance with the Listing Requirements.
The summary of the Committee findings is as follows:
- The conduct of Messrs Diamond, Kaplan and Prosser has caused damage and embarrassment to Blue Label and its stakeholders and requires censure in the form of a reprimand from the Board.
- Their conduct does not justify their dismissal or the termination of their directorship, nor would it be in the best interests of TPC, Blue Label and its stakeholders for their employment or directorship to be terminated.
- Every member of the Board of TPC has confirmed in writing that there are no dealings in Blue Label shares by them or their associates beside the share dealings that have already been reported.
- Additional measures have been put in place to ensure that all Directors are aware of their compliance obligations under the Listing Requirements in relation to share dealings; and
- All directors of the Blue Label Group, in respect of whom the Listing Requirements have application, have been required to attend a workshop on the Listing Requirements, under the auspices of the JSE on the 16th April 2008.
Mark and Brett Levy concluded: “It is unfortunate that these share dealings have attracted so much adverse publicity. It needs to be emphasised that these were not trades that took place during a closed period or in respect of which there were any insider trading irregularities. We are confident that these matters are behind us, that lessons have been learnt and that Blue Label will continue to deliver on its fundamental value proposition to all of its stakeholders.”
