Limited - Announcement Regarding Fsb Settlement An
Datatec Limited
Financial Services Board ("FSB") Settlement
Following the events of April 13, 2000 fully described in the Datatec press
release dated 21 May 2001, the directors of Datatec, excluding the
individuals involved (Messrs Montanana and Rindel), authorised the company
to make the payment of R1m proposed by the FSB as a settlement, without
admission of guilt or liability, arising from the alleged disclosure of a
specific item of inside information to an analyst.
This decision was taken by the Board, after due consideration of the
following:
- the incident took place in the course of the exercise of their duties as
group executives.
the individuals themselves did not benefit from this disclosure;
- the individuals had no incentive or improper motive to release the
information;
- the individuals did not trade in any Datatec shares during the relevant
period;
- the individuals themselves suffered significant loss as a result of the
subsequent decline in the Datatec share price, and
- The individuals had senior counsel advice that they had a very reasonable
prospect of defending the claim but the Board wished the matter to be
brought to finality.
In response to the negative publicity Datatec has received with regard to
the company having paid the settlement to the FSB, the individuals have
elected to repay the settlement amount of R1m to the company.
The Board, in turn, has noted with concern that the original decision to pay
the settlement on behalf of the individuals may undermine the intent and
objectives of the Insider Trading Act. This is totally contrary to the
Board's attitude to the Insider Trading Act and was not anticipated at the
time of the decision. Notwithstanding the specific circumstances of this
case, the Board has agreed to accept the repayment of the settlement amount
by the individuals.
Bonuses relating to the sale of Datatec Ltd's 76% stake in UUNET SA
The Board has taken into account major shareholder sentiment and public
comments concerning remuneration of head office directors based on
subsidiaries' performance and in particular the recent bonuses arising from
the sale of UUNET.
The Board has accordingly resolved to restructure existing share and
incentive schemes for head office executives to ensure that they are
incentivised at the Datatec level only and that their interests are totally
aligned with Datatec shareholders.
With regard to the incentive bonus payments made in the 2001 financial year
to Messrs Montanana and Rindel, in respect of the sale of UUNET, the Board
is in discussions with its major shareholders and these individuals with a
view to achieving an acceptable balanced outcome.
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
