The Public Investment Corporation (PIC) on Tuesday rejected suggestions that it was somehow to blame for ZAR X stock exchange’s conduct that led to its licence being suspended.
The PIC said it noted the decision of the Financial Sector Conduct Authority (FSCA) to suspend the licence of ZAR X stock exchange.
The PIC – on behalf of the Government Employees Pension Fund – is a 24,14% shareholder in ZAR X.
“We have also noted the public statement by ZAR X that it has concluded a significant equity transaction with a foreign-based investor to acquire a controlling interest in the exchange,” said the PIC.
“We have further noted the unfortunate misrepresentation that the transaction [with a foreign-based investor] ‘has been stalled due to an inability by ZAR X’s largest shareholder the PIC, to grant formal approval of the transaction due to protracted internal issues and governance processes.’”
The ZAR X statement further states that, “the transaction would be concluded by 20 August 2021 which would have pre-empted the need for the suspension”, laying the blame squarely on the PIC.
“It is necessary to state that there are no protracted internal issues and governance processes within the PIC,” said the public investment corporation.
“The PIC subjects investment proposals, including reinvestment proposals, to a thorough investment process for the benefit of clients on whose behalf it invests.
“Whilst it is not in PIC’s character to publicly debate its relationship dynamics with investee companies, it is necessary to state that the PIC has demonstrated its support for ZAR X and has gone the extra mile to ensure that it succeeds.”
While the PIC said its support for ZAR X has remained unwavering, it was doing so “on a risk-adjusted basis for the benefit of the clients on whose behalf it invests”.
ZAR X co-founder and CEO Etienne Nel said in a statement on Monday that the exchange had lodged an appeal against its suspension but would continue working with the FSCA and other regulatory authorities to resolve the issue.