THE Financial Services Conduct Authority (FSCA) has started an insider trading investigation against Huge Group Limited. The FSCA said the probe would cover disclosures and transactions of the telecommunications company.
In a statement, the FSCA said last month it confirmed that it registered an investigation regarding transactions in Huge with a specific focus on transactions concluded during the period from December 2020 to February 2021.
“The FSCA is aware that Huge Group Limited has given notice that it intends to acquire all the issued shares of Adapt IT Holdings Limited in a share-for-share transaction based on 0.9 Huge shares to be offered for each Adapt IT share tendered, and undertook to disclose its findings as soon as possible,” it said.
While the FSCA said it found insufficient evidence to conclude that Huge Group performed prohibited trading practices, the investigation would remain open while it “continues to investigate other transactions in Huge Group securities that may constitute prohibited trading practices”.
The regulator said it intended to engage with licensed exchanges, including the JSE, and the broader market regarding the rules applicable to share repurchase programmes.
The aim would be to gather information on whether the present rules provide sufficient investor protection when a listed company is significantly the largest purchaser of its own thinly traded shares. This is because the consequences, as in this case, might be to affect a share price. This was a matter of concern for the FSCA as a regulator of financial markets.
BUSINESS REPORT ONLINE