JSE LIMITED - GEN - General - Huge Group Limited -Messrs Herbst & Potgieter

GEN - General - Huge Group Limited -Messrs Herbst & Potgieter

GEN – General – Huge Group Limited – Messrs Herbst & Potgieter

"On 16 October 2008, Huge Group Limited (Huge Group or the Company) acquired a long position in
80 455 single stock futures (SSF) contracts in which the underlying instruments were 8 045 500 of its
own ordinary shares. The SSF contracts were described by the JSE Limited’s Derivative Market as
HUGEQ SSFs and were accordingly physically settled SSF contracts, requiring the holder of the long
position to take physical delivery of the underlying instruments in the event that the HUGEQ SSFs
were left to expire, and not closed out or not rolled over into longer dated contracts. While Huge
Group did not enter into a derivative transaction involving its own ordinary shares, it acquired
derivative instruments that may have resulted in it having to take physical delivery of 8 045 500 Huge
Group ordinary shares.

On 7 November 2008, the JSE Limited (the JSE) made a finding that Huge Group had breached
paragraph 5.69 of the JSE Listing Requirements (the LRs). Ultimately Huge Group accepted the
finding of the JSE.

During 2009, the JSE found that the actions of two directors of Huge Group, Messrs Anton Potgieter
and James Herbst (the Directors), had caused Huge Group to breach paragraph 5.69 of the LRs. The
Directors took this finding of the JSE on appeal to the Financial Services Board (the FSB). While the
FSB upheld the appeal of the Directors it found that the Directors breached paragraph 5.69 read with
paragraph 5.82 of the LRs. The Directors approached the North Gauteng High Court (the Court) to set
aside this finding of the Appeal Board on the basis that no opportunity was afforded to the Directors to
make representations on the application of paragraph 5.69 read with paragraph 5.82 of the LRs. On
29 October 2013 the Court delivered judgment and set aside these findings of the Appeal Board and
left the matter in the hands of the JSE to take further steps as it may deem necessary.


The JSE has considered bringing a charge of a breach of paragraph 5.69 read with paragraph 5.82 of
the LRs against the Directors.

In order to resolve the long running dispute between the JSE and the Directors in regard to this
matter, the Directors have acknowledged that:

    1.  the provisions of paragraph 5.69 read with paragraph 5.82 of the LRs may apply to
       acquisition of derivative instruments (in circumstances where the relevant transaction took
       place prior to the repeal of LR 5.82);
    2. the General Principles enshrined in the LRs required the Directors to have greater regard
       to –

         a.     ensuring that holders of the relevant securities are given full information and afforded
                adequate opportunity to consider in advance and vote upon matters affecting a listed
                company’s constitution or the rights of holders of securities; and
         b.     ensuring that the LRs promote investor confidence in standards of disclosure and
                corporate governance in the conduct of the applicant issuer’s affairs and in the
                market as a whole.

The JSE has decided that an appropriate sanction in the circumstances is a fine of R300 000.00 on
each Director."


31 May 2016

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