TRANSACTIONS IN THE SHARES OF WESTERN AREAS LIMITED AND HARMONY GOLD MINING COMPANY LIMITED DURING DECEMBER 1999 AND JANUARY 2000
During the earlier part of 2000, the Registrar of Stock Exchanges caused an inspection to be instituted into the affairs of certain entities, and their associated institutions, in order to establish whether or not they had contravened section 40 of the Stock Exchanges Control Act, 1985.
Section 40 prohibits, amongst others, any transaction, including a bear sale, entered into with the intention of influencing or manipulating the price of listed securities.
The inspection arose from an enquiry by the Surveillance Department of the Johannesburg Securities Exchange into what it perceived to be unusual share transactions during December 1999 and January 2000 in the shares of Western Areas Ltd and Harmony Gold Mining Company Ltd.
On 31 October 2000 the inspectors presented their final report to the Registrar who, in terms of the Inspection of Financial Institutions Act, 1998, made copies of the report available only to certain affected parties. The Act limits the disclosure of information obtained during an inspection. The recipients of copies of the report were invited to submit their comments or response to the report to the Registrar and were allowed a reasonable time to do so.
After due consideration of the report and the submissions in response thereto, the Registrar adopted the view that the matter justified further investigation by the competent authorities into whether section 40 of the Stock Exchanges Act had been contravened and/or other offences committed in the course of the share transactions which formed the subject of the inspection.
The matter was accordingly referred to the Director of Public Prosecutions who was furnished with copies of the inspection report as well as the responses thereto.
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.