Zakhele counts down to resume trading

2014-01-12 14:00

MTN Zakhele chairperson Thulani Gcabashe says the trading of shares will still resume later this month after a wobbly start late last year.

There are also questions about the ability of MTN Zakhele to manage its trading platform.

MTN Zakhele is the BEE scheme launched by cellphone giant MTN in 2010.

The scheme allowed shareholders to buy shares at R20, while the rest of the share price was financed through notional vendor financing from the company, donations from MTN and funding from third party lenders. MTN Zakhele owns 4% of MTN’s issued share capital.

Limited trading was due to start in November last year. However, MTN Zakhele reported several hiccups on its over-the-counter share-trading platform and trading was suspended several times.

The technical upgrades that had to be done to the trading platform have been completed and MTN Zakhele is waiting for the go-ahead from the Financial Services Board (FSB).

“We do not know at this point exactly when trading will resume, but it will still be in January. We have given our report to the regulator [the FSB] and are waiting for it to get back to us,” said Gcabashe.

The FSB confirmed that it was analysing the MTN Zakhele report.

“We have wanted to guarantee that the platform is robust and can handle the volume trades rather than stop, kick-start and stop,” said Gcabashe.

The consortium behind the share-trading platform consists of Link Market Services, STT and Velocity Trade, with Tamela Holdings acting as project manager.

MTN Zakhele broke ranks with other companies that have used Equity Express, a trading platform belonging to software company Singular Systems, which has a virtual monopoly on over-the-counter trading in South Africa.

BEE shareholders in Imperial, Thembeka Capital, Assupol, MultiChoice, Vodacom, African Bank, Media24, Lenmed Health and Sasol trade their shares through Equity Express.

Sydney Mhlarhi, a director at Tamela, said when the board evaluated companies to run the platform, the consortium seemed to be the best choice.

One of the reasons was the involvement of Link Market Services in the consortium because of its experience in handling MTN Zakhele’s shareholder register. This meant that it was familiar with the scheme.

The call centre was another issue for shareholders, who were complaining that calls were going unanswered. Gcabashe said capacity had been doubled to 80 agents.

In only two days of trade for MTN Zakhele shares, the share price broke through the R80 barrier and about R15.9?million exchanged hands.

But this was far below valuation.

MTN Zakhele has put the net asset value of its share at R104.63.

A report by investment banking company UBS estimates the share was worth R137 based on the 4% stake it holds in the MTN Group, less the debt the scheme has paid.


»?October 28 2013?–?MTN Zakhele says limited trading of its shares will begin on November 25.

»?November 25 2013?–?Trading begins. By the end of the first day, about 93?000 shares with a total value of R8.1?million changed hands and the share closed at R84.

»?November 26 2013?–?Second day of trading and more than 100?000 shares worth R7.8?million were traded. The share closed at R80.

»?November 27 2013?–?Trading through the website and the call centre is suspended “due to technical issues experienced as a result of the unprecedented volumes”.

»?November 28 2013?–?MTN Zakhele says trading should resume on December 2.

»?December 5 2013?–?Date for resumption of trade moves to December 17.

»?December 14 2013?–?Date moves to some time in January. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

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