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Another top executive quits Sentula
Brendan Ryan
Posted: Mon, 23 Jun 2008
[miningmx.com] -- THE bodies are flying out of coal and contract mining junior Sentula Mining which is being investigated by the Financial Services Board (FSB) over possible insider trading.
Latest to leave is Jason Holland, the group’s finance manager and a director of subsidiary Scharrighuisen Opencast Mining, who resigned on June 18 “to pursue other interests.”
Holland’s departure was only announced by Sentula on June 20 but he appears to have resigned at the same time as Sentula non-executive director Treve Hendry whose decision to quit was published on Sens on June 18.
Hendry, according to the Sens notice, had decided to resign with immediate effect “to devote his time exclusively to Argent Industrial Limited where he is chief executive.”
The insider trading investigation at Sentula was initially launched by the JSE into unusually heavy trading volumes
in the share immediately prior to a Sens announcement it put out on June 2 regarding the restatement of its 2007 annual results.
Some 30% was immediately knocked off the share price bringing it down to around R12 and Sentula is currently trading around R11,20.
The JSE subsequently referred the investigation to the FSB. The scope of the investigation has not been defined but a key date has to be March 10 when former major shareholders Coronation Capital and Jonah Capital sold off most of their stakes in Sentula.
The two sold out at R21.75 a share through a book-build exercise run by Barnard Jacobs Mellet which brought in R680m in total.
Jonah Capital said at the time it needed money to fund its new coal ventures in Botswana through Jonah Coal which is a 50/50JV with Sentula.
Head of Jonah Capital is mining entrepreneur Sam Jonah who is also non-executive chairman of Sentula. His son, Richard, is a director of Sentula and also sits on the company’s audit and risk committee.
Coronation said the size of its investment in Sentula – relative to its portfolio parameters – had grown “considerably” and Coronation had decided to partially reduce its holdings as a result.
Coronation executive Allan Joffee is a non-executive director of Sentula and chaired the audit and risk committee up to August last year.
The problem that triggered the June 2 Sens announcement involved accounting issues unearthed by new auditors KPMG who took over from the end of last year. Holland was formerly Sentula’s financial director according to the 2007 annual report.
The Sentula board knew of the existence of a problem with the accounts from early in the year but, according to CEO Robin Berry, “it was only from last week (the week prior to June 2) that management was confident enough in its understanding of the situation to expose the erroneous nature of the previous accounts.”
Berry said the board sought a legal opinion when Jonah Capital and Coronation Capital indicated they wanted to sell their shares.
Joffee has denied that Coronation was in possession of price sensitive information when it decided to sell down its stake. He commented, “had there been such price sensitive information available, Sentula would have had to make an announcement.”
Hendry and
Holland along with executive director Clint Moorcroft sold Sentula shares worth R14,2m in total between January 10 and February 27 ahead of the March 10 annnouncement.
Berry commented, “they got the necessary permission to deal from the chairman.”
Asked whether the resignations of the two executives were linked to the insider trading investigation Berry replied, “the investigation by the FSB has not yet started and the executives have resigned for the reasons stated in the Sens announcements.”
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