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General – Censure imposed by the JSE on PSG Capital (Pty) Ltd
GEN – General – PSG Capital (Pty) Ltd
Censure imposed by the JSE on PSG Capital (Pty) Ltd (“PSG Capital”)
The JSE hereby informs stakeholders of the following findings in respect of PSG Capital regarding
advice previously provided by it as sponsor during 2015:
1. PSG Capital was the appointed JSE sponsor to African Equity Empowerment Investments
Limited (“AEEI”) until PSG Capital’s resignation with effect from 31 January 2019.
2. On 19 May 2015, AEEI published a SENS announcement informing shareholders that AEEI,
through a subsidiary company, known as Bowwood and Main 180 Proprietary Limited
("Bowwood"), would acquire 25% plus one share of the issued share capital of SAAB Grintek
Defence Proprietary Limited from SAAB South Arica Proprietary Limited ("SAAB")
(“Acquisition”). The Acquisition was categorised as a Category 2 transaction in terms of the JSE
Listings Requirements necessitating only a SENS announcement.
3. However, in addition to the Acquisition, the SENS announcement and relevant shareholder
agreements entered into between the parties in 2015 further included reference to a call
option granted by Bowwood to SAAB which entitled SAAB, at its sole discretion, to acquire all of
Bowwood's shareholding in SAAB Grintek Defence Proprietary Limited at any time after 60
months from the effective date for a purchase price payable at the market value as agreed or
failing agreement, a value determined by an independent valuer ("Call Option").
4. In accordance with the Listings Requirements, the grant of an option that is exercisable at the
sole discretion of the option holder is regarded as a transaction and must be categorised at the
date of grant of the call option, as if the option had been exercised. In addition, where the total
consideration of the transaction is not subject to any maximum, the transaction must be
treated as a Category 1 transaction.
5. The grant of the Call Option to SAAB in May 2015, where the consideration was not subject to a
maximum value and was at SAAB’s sole discretion, should have been categorised as a Category
1 transaction for which AEEI was required to inform shareholders in the 19 May 2015 SENS
announcement that the Call Option was subject to shareholders’ approval and furthermore,
AEEI was required dispatch a circular to shareholders, within 60 days of the SENS
announcement, to obtain their approval of the Call Option prior to the issue of the Call Option,
which AEEI did not do.
6. In December 2020, SAAB exercised the Call Option and Bowwood disposed of the subject shares
without the requisite approval of AEEI’s shareholders and in contravention of the requirements
governing Category 1 transactions.
7. PSG Capital, in its role as the former sponsor to AEEI, incorrectly advised AEEI in 2015 that the
Listings Requirements were applicable to the exercise and implementation of the Call Option
and not when the Call Option was granted, as is required in the Listings Requirements.
8. Accordingly, the JSE found PSG Capital to be in breach of paragraph 2.8(h) of the Listings
Requirements for its failure to discharge its responsibilities as AEEI’s sponsor in 2015 with due
care and skill which failure directly resulted and/or contributed to AEEI’s failure to comply with
important provisions of the Listings Requirements.
9. Sponsors play an important role in ensuring that issuers meet all the criteria stipulated in the
Listings Requirements. Sponsors also play a critical role in assisting and guiding issuers in
complying with the Listings Requirements, especially on matters which require investors to
exercise important voting rights. SENS announcements must contain all relevant information to
ensure that investors and potential investors are made aware of pertinent events that are being
proposed by an issuer. The JSE therefore places significant reliance on a sponsor fulfilling this
role to ensure proper regulation of the market. PSG Capital breached its responsibilities in respect
of its advice to AEEI.
10. For these reasons and with reference to the JSE’s findings of breach, the JSE has decided to
impose this public censure against PSG Capital.
27 January 2022
Date: 27-01-2022 07:05:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
