The Insider Trading Directorate (ITD) has fined Datatec chairman Jens Montanana and financial director Robin Rindel R1 million.
The two have paid the fine as a full and final settlement to the Financial Services Board, of which the ITD is a part, without admitting any guilt or liability.
The ITD originally proposed referring the case for legal action, and, while the ITD is restricted from giving much detail, other parties appear to be still under investigation.
Montanana and Rindel say they decided to make the settlement payment to remove "the ongoing uncertainty and potential damages to the company, which a failure to arrive at a settlement, with consequent protracted proceedings, could have had on the company and the company`s shareholders".
The events relate to a meeting with an unnamed investment analyst on 13 April last year.
"During that meeting and in response to a direct question from the analyst, they indicated that the company would not meet certain analyst consensus forecasts for the 2000 financial year," the company says.
While the directorate says the disclosure was a release of inside information, the two directors contend that the information was neither specific nor precise and should have been widely known in the market as a result of previous commentary.
The Datatec share price lost almost 57% between 12 and 17 April last year.
Speaking on Classic FM`s radio programme Classic Business last night, ITD chairman Rob Barrow said the directorate considered the situation an act of negligence on the part of the company.
The ITD says the decision to reach a settlement was taken on the basis that Montanana and Rindel did not benefit from the disclosure, had no incentive or improper motive to release the information, and did not sell Datatec shares on the relevant day.
It also took into account the fact that the directors themselves suffered significant loss as a result of the decline in the share price.
"The company and the directors, however, appreciate the view of the directorate and in the future will be even more cautious and considered in their responses," Datatec said in a statement.
The Datatec share was trading 6.23% or R1.05 up at R17.90 on the JSE by late morning.
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