On 7 September 2000, the Registrar of Stock Exchanges caused an inspection to be instituted following an enquiry by the Surveillance Department of the Johannesburg Securities Exchange into what it perceived to be unusual share transactions between 10 August and 6 September 2000 in the shares of The Internet Gaming Corporation Limited.

The inspection related to the affairs of certain persons and entities in order to establish whether or not in participating in these share transactions they had contravened section 40 of the Stock Exchanges Control Act, 1985.

Section 40 prohibits, amongst others, the creation of fictitious transactions in order to stimulate activities or influence or manipulate the price of listed securities, or the entering into any transaction with such objective.

It should be emphasized that the inspection was not aimed at the business activities of The Internet Gaming Corporation Limited as such, but focused exclusively on transactions conducted in the shares of that company by the inspected parties.

On 28 February 2001 the inspector presented a final report to the Registrar who, in terms of the Inspection of Financial Institutions Act, 1998, made copies of the report available only to a certain affected party. The Act limits the disclosure of information obtained during an inspection. The recipient of the report was invited to submit his comments or response to the report to the Registrar and was allowed a reasonable time to do so. No response was received by the Registrar’s office despite a further invitation to that effect.

After due consideration of the report, the Registrar adopted the view that the matter justified further investigation by the competent authorities into whether section 40 of the Stock Exchanges Control Act had been contravened in the course of the share transactions which formed the subject of the inspection.

The matter has accordingly been referred to the Director of Public Prosecutions who has been furnished with a copy of the inspection report.

Although this release is made in the interests of transparency, neither the Financial Services Board nor the office of the DPP would in law be entitled to furnish more information or to comment further on this issue. The FSB will most definitely also not speculate as to how the DPP will exercise his prerogative of either prosecuting or declining to prosecute any party. Interested parties are accordingly requested not to contact the FSB or the DPP while the matter is still under investigation.