Johannesburg, 22 May 2001
The Insider Trading Directorate ("the Directorate") issued a press release today advising that a settlement had been reached with two directors of Datatec Limited, Messrs J P Montanana and R S Rindel. The directors, without admitting any guilt or liability, have agreed to make a full and final settlement payment to the Financial Services Board of R1 million. This decision was made by the directors with the intention of removing the ongoing uncertainty and potential damage 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 settlement relates to the events that took place on 13 April 2000 in a meeting requested by an investment analyst with these Datatec directors. 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 Directorate is of the opinion that this disclosure constituted the release of inside information in contravention of the Insider Trading Act, 1998. The directors contend that this information was neither specific nor precise and should have been widely known in the market as a result of previous commentary and therefore their reply could not be considered inside information.
In agreeing to the settlement, the Directorate took into consideration that:
the directors themselves did not benefit from this disclosure;
the directors had no incentive or improper motive to release the information;
the directors did not sell any Datatec shares on the relevant day;
and the directors themselves suffered significant loss as a result of the subsequent decline in the Datatec 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.
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