| Tue 28 Oct 2008, 9:00 | | VOX - Vox - Trading update Update regarding Deals |
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VOX
VOX
VOX - Vox - Trading update, Update regarding Dealstream securities and related
effects on Vox and changes to the board
VOX TELECOM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/016433/06)
("Vox" or "the Company")
JSE Code: VOX & ISIN Code: ZAE000097234
TRADING UPDATE, UPDATE REGARDING DEALSTREAM SECURITIES AND RELATED EFFECTS ON
VOX AND CHANGES TO THE BOARD
1. TRADING UPDATE
In accordance with paragraph 3.4 of the Listings Requirements of the JSE
Limited ("the JSE"), a listed company is required to publish a trading
statement as soon as it becomes aware, with a reasonable degree of
certainty, that the financial results for the next period to be reported on
are likely to vary by more than 20% from the previous corresponding period.
The Company`s financial results for the year ended 31 August 2008 are
expected to be announced on or about 19 November 2008. Shareholders are
advised that a reasonable degree of certainty exists that the company`s
earnings per share ("EPS") and headline earnings per share ("HEPS") are
expected to be between 45% to 55% lower than 7.67 cents per share reported
in the prior year as a result of the collapse of Dealstream Securities
(Proprietary) Limited ("Dealstream") and reported related events ("the
Dealstream events") referred to in more detail below.
However, if the Dealstream events and related effects on Vox are excluded
from the calculation above, EPS and HEPS would have been between 20% to 30%
higher than 7.67 cents per share achieved respectively in the prior year.
The Dealstream events are regarded as exceptional in nature or `once off`
and have no direct impact on the operational performance of the Company.
This trading statement has not been reviewed or reported on by the
Company`s external auditors.
2. FURTHER UPDATE REGARDING DEALSTREAM SECURITIES
Following the SENS announcements dated 23 September 2008 and 26 September
2008 with regard to the Dealstream events, the Company would like to update
shareholders on the following matters.
2.1 FSB Investigation and Curatorship of Dealstream
The Financial Services Board ("FSB") have issued an inspection report
on Dealstream. This investigation was conducted at the request of the
Registrar of Securities Services and Financial Services Providers and
the report formed part of the documents presented in a hearing in the
Pretoria High Court on Tuesday 7 October 2008 for the appointment of a
curator for Dealstream.
Vox fully supports the FSB`s investigation of Dealstream although Vox
has not yet had the opportunity to engage with the FSB with respect to
its investigation.
Vox has met directly with the curator of Dealstream and detailed the
basis of the Company`s claim against Dealstream. The Company`s legal
advisors are in the process of formally compiling this claim, which
will be lodged with the curator in due course.
2.2 Forensic investigation
The Company has appointed a firm of independent forensic auditors
("forensic auditors") to investigate the possible misappropriation of
Company assets by Dealstream. This investigation is underway and the
curator has agreed to cooperate with Vox where required.
As a result of this investigation, it has come to the attention of the
directors that 27 300 000 shares issued by the Company for the
purposes of a share incentive scheme established for the benefit of
the Company`s employees and which were held by a third party, may have
been misappropriated by Dealstream and the recoverability thereof
materially prejudiced.
The forensic auditors, the Company`s legal advisors and the curator
are investigating the circumstances under which these shares appear to
have been misappropriated and in the event of their non-
recoverability, the additional exposure to the Company would be a
reduction in equity of approximately R17 million with no related
income statement effect.
2.3 Criminal action
The Company has been advised by its attorneys that in terms of the
Prevention and Combatting of Corrupt Activities Act 12 of 2004, the
directors of the Company have a duty to report any theft, fraud,
extortion, forgery or uttering a forged document that comes to their
attention, where the amount in question exceeds R100 000.
On the basis of current available information the Company has
instructed its attorneys to report the perpetrators to the prosecuting
authorities and to assist the relevant authorities in any ensuing
investigation and prosecution.
Should the forensic investigation or any of the other processes reveal
the involvement of further participants in any criminal activity then
Vox will seek the full remedy available to it in law against such
perpetrators.
2.4 Directors dealing in securities
On Monday, 22 September 2008, the Company directors and staff formally
notified Dealstream to close their Contracts For Difference ("CFD")
positions with immediate effect and the proceeds thereof be remitted
to the respective counter-parties` bank accounts. This instruction was
as a result of the Dealstream events.
Given the Dealstream events it is now likely that the receipt of
proceeds in respect of closed out CFD positions previously held with
Dealstream have been materially prejudiced.
In addition, two directors, Doug Reed and Jacques du Toit, held open
positions in Vox via Single Stock Futures through another JSE member,
which have now been closed out as a direct consequence of the
Dealstream events.
The table below sets out the positions/interests of the executive
directors in Vox prior to the collapse of Dealstream:
EXECUTIVE NUMBER OF NUMBER OF NUMBER OF STOCK
DIRECTORS ORDINARY SHARES CFD`s OPTIONS
SHARES THROUGH
SSF`s
DG REED 0 26,710,000 59,167,219 0
AP VAN 11,660,377 0 14,000,000 6,000,000
MARKEN
G SWEIDAN 398,229 0 10,000,000 1,500,000
J DU TOIT 0 22,993,493 0 0
M VON HOLDT 0 0 19,081,400 4,000,000
TOTAL 12,058,606 49,703,493 102,248,619 11,500,000
The table below sets out the current positions/interests of the
executive directors in Vox following the collapse of Dealstream:
EXECUTIVE DIRECTORS NUMBER OF ORDINARY STOCK OPTIONS
SHARES
DG REED 0 0
AP VAN MARKEN 11,660,377 6,000,000
G SWEIDAN 398,229 1,500,000
J DU TOIT 0 0
M VON HOLDT 0 4,000,000
TOTAL SHAREHOLDING 12,058,606 11,500,000
The Company has met with its major shareholders and has discussed a
proposal for a new share incentive scheme for directors and key staff.
The details of this scheme will be presented on or about 19 November
2008 when the Company reports its Annual Results for the year ended 31
August 2008. This scheme will be subject to shareholder approval and
will be communicated in a detailed circular.
2.5 Updated shareholding in Vox
As a result of the Dealstream events and following Rand Merchant Bank
("RMB") taking over the Dealstream portfolio, the shareholder register
of Vox has materially changed.
In this regard the Company would like to provide a summary of the
major shareholders of reference, as follows:
KEY SHAREHOLDERS NUMBER OF PERCENTAGE
SHARES OWNERSHIP
LEREKO METIER CAPITAL 269,000,000 24.43%
GROWTH FUND
RAND MERCHANT BANK ("RMB") 259,817,700 23.59%
MVELAPHANDA GROUP 137,500,000 12.48%
PUBLIC INVESTMENT 90,000,000 8.17%
CORPORATION
REGIMENTS CAPITAL 47,000,000 4.27%
PSG GROUP 30,812,856 2.79%
THEMBEKA CAPITAL 17,857,143 1.62%
TOTAL SHAREHOLDING 851,987,699 77.36%
Note:
The percentage ownership of these major shareholders is based on a
fully diluted number of 1 101 326 786 shares in issue.
As per the SENS announcement by Firstrand on 9 October 2008 and
following the Dealstream events, RMB now holds a strategic position in
Vox as illustrated in the table above.
3. APPOINTMENT OF NON-EXECUTIVE DIRECTOR
In accordance with rule 3.59(a) of the JSE Listings Requirements, the board
is pleased to announce the appointment of Mr Pierre Joubert, Senior Private
Equity Transactor, RMB, as a non-executive director with immediate effect
as a result of RMB`s strategic shareholding in Vox referred to above.
Pierre joined Reunert Ltd as a project accountant after qualifying as a
Chartered Accountant with Deloitte & Touche in 1992 and fulfilled various
financial roles within the Reunert group culminating in the position of
financial director of one of the group`s subsidiary company`s. In May 1997
he was the Commercial director of the Connection Group, a diversified IT
company and then appointed financial director of Software Connection Ltd
upon listing during October 1997. In April 1999 he assumed the role of CEO
of Connection Group Holdings and led the transformation of the group from a
situation of severe financial distress to that of a successful and vibrant
retail organisation. In November 2002, Pierre joined RMB, as a senior
equity transactor. Together with a colleague, he established a new business
unit within RMB that has enjoyed much success in the area of value
investment, primarily in listed securities.
Management welcomes Pierre to the board and extend their best wishes with
the appointment and the concomitant challenges it will bring.
4. FURTHER DEVELOPMENTS
Shareholders will be kept informed of any further developments.
Johannesburg
28 October 2008
Designated Adviser PSG Capital (Pty) Limited
Date: 28/10/2008 09:00:01 Produced by the JSE SENS Department.
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