Media coverage
4 April 2012
Coal of Africa hasn’t been enjoying the easiest of times lately
Source: www.businessday.co.za
Author: David Gleason
COAL of Africa (CoAL) hasn’t been enjoying the easiest of times lately. It is under persistent attack by the Greenies because of its mining project close to Mapungubwe, once a flourishing Iron Age kingdom at its apogee about 1000 years ago. Mapungubwe, close to the international borders where SA, Botswana and Zimbabwe meet, is a World Heritage Site (2003) so mining, even though it is some distance from its boundary, invites active hostility on the part of environmentalists.
This isn’t all that’s troubling the company though. It is listed on the JSE, and on the Australian Stock Exchange (ASX) and on the London Stock Exchange’s AIM market for smaller growing companies.
Section 671B of the Australian Corporations Act requires that the market be advised of movements of 1% or greater in the holdings of substantial shareholders. AIM rule 17 requires the same disclosure for what it calls DTR companies — that are required to comply with the UK Financial Services Authority’s d isclosure and t ransparency r ules.
In CoAL’s case, however, it is Australian-registered, so is exempt on the one hand and promptly caught on the other since dual-listed entities are required to disclose to all exchanges what is disclosed to one.
CoAL’s immediate problem is that it released a 567-page restructuring document to the ASX in November — and didn’t release that information to the JSE or to AIM. Nor is the document on CoAL’s website, as required by AIM’s rules. I am advised that one purpose of the restructuring was to ensure concerned investors would not be deemed tax resident in SA, with the exposure that would bring. You would think, if a matter of some delicacy is being dealt with, that the company would ensure it complies with these boring but unavoidable requirements.
The event accompanying the restructuring document was the issue of 130-million new shares in two tranches. Most of the significant shareholders participated and their new shareholdings were affected by more than 1% — but some haven’t advised the market. The shareholding of M&G Investments, for example, has changed by nearly 4%, African Global Capital (CoAL’s empowerment partner) and BlackRock by more than 2%.
These amounts may appear trivial, but rules aren’t always meant to be broken and, in this case, it is possible the company may shortly have three sets of regulators breathing down its neck. I understand that AIM is already investigating this apparent breach of its rules. If it finds CoAL has been naughty, sanctions may be applied and other regulatory bodies informed.
Perhaps the company secretary needs to spend less time sleeping under the Coolibah tree.