Mungo Soggot
THE Securities Regulation Panel (SRP) this week vowed to subpoena a Mail & Guardian journalist in the hope of furthering its insider trading probe at car manufacturer Automakers.
The M&G reported last week that the SRP planned to investigate the cause of a 37% increase in the price of Automakers shares on the Johannesburg Stock Exchange (JSE) on January 14. The article, based on interviews with a string of sources who spoke on condition of anonymity, said: “Unconfirmed reports suggest the probe focuses on a family member of a senior Automakers executive, who allegedly tipped off friends.”
The share price surge came amid talk that Automakers’s main shareholder, Sankorp, was poised to strike a deal with a foreign partner and preceded an announcement the following Monday that the company would delist.
At the time the panel refused to comment on the individual, while Automakers boss John Newbury and the individual himself dismissed the allegation.
SRP executive director Richard Connellan said on Wednesday the panel would subpoena M&G journalist Max Gebhardt to find out who his sources were. Connellan, whose panel has yet to prosecute a single case for insider trading, admitted he had not yet read the article.
He said this newspaper appeared to be under the impression it did not have to reveal its source. “Our legal advice is otherwise,” he said. “We want to get all the pieces of the jigsaw puzzle.”
The M&G’s lawyer said a subpoena would be an “improper application” of the Companies Act which allowed the panel to subpoena for information on insider trading. He added that such an application of the Act was unconstitutional as it invaded journalistic rights.
Another company lawyer scoffed at the panel’s strategy, suggesting it showed how desperate it was for a successful prosecution. “The M&G is presumably picking up the same gossip as everyone on the JSE. Why not pick on someone else?” He said the approach was “offensive. They [the panel] should do their own work…”
JSE president Roy Andersen said he was not in a position to comment on the SRP’s strategy.
Connellan told M&G photographer Ruth Motau that he would consent to having his picture taken only when the M&G started co- operating.