A Fin24 user has a question about payouts by Standard Bank's Tutuwa Share Scheme. He writes:
With Standard Bank's Tutuwa Share scheme's lock-in period ending on December 31, a massive amount of money will be paid to shareholders in this scheme.
The concerning bit is that the share price is consistently falling day in and day out for the past few weeks.
The lower the share price becomes, the lower the payout to shareholders. Does any degree of control of the share price reside within the bank?
Standard Bank spokesperson Ross Linstrom responds:
A listed company's share price is driven by various factors. Market forces and sentiment, as well as global, regional and domestic events can affect a company's share price, in the same way that the recent financial performance of a company and the market's expectations of future performance also affect the share price.
It is illegal for a company to manipulate, or attempt to manipulate, its share price and Standard Bank will not partake in such an activity.
Regarding Standard Bank's Tutuwa scheme, while your query rightly points out that the scheme's ten year lock-in period ends at 24:00 on December 31 2014, the scheme itself only ends in October 2019.
Beneficiaries thus do not have to sell their shares immediately upon the ending of the lock-in.
So, while beneficiaries of the scheme may elect to sell all or some of their shares immediately after the lock-in date and receive a payout after settling funding costs and taxes, they do not have to do so.
They could wait until some point up to October 2019 to sell and receive proceeds from the sale of their shares, again after the settlement of funding costs and any applicable taxes.
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