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Another trading blow to MTN investors

17 Dec 2013

As the trading of empowerment shares linked to MTN seems to be running on "African time", black investors are left wondering if they will be able to eventually sell their shares.

MTN's Zakhele shares cannot be traded until January. Image: Santiago Silver Fotolia

MTN released a statement over the weekend stating that trading of the shares has again been postponed, this time until January.

Investor Prizzer Ndlovu has threatened to take MTN to the National Consumer Commission. "If black economic empowerment means companies could use black people as their toys in the trading of shares, this means government should intervene to curb such practices," she claimed

Ndlovu said it did not make sense to postpone trading to January because people would be broke and the demand for the shares would have declined.

"The worst thing about this is that MTN has not even explained what the problem is and it is proving to be very difficult to get hold of the company regarding these postponements," she said.

Stop-start trading

There has been uncertainty over the trading of the MTN Zakhele shares worth R13.8bn since the system collapsed last month because of inadequate capacity to meet the high demand for the shares.

The announcement could be taken with a pinch of salt by despondent MTN Zakhele shareholders as this is the third postponement relating to the trading.

According to an MTN statement the trading of the shares began on 25 November and on the first day, about 93,000 MTN Zakhele shares with a total value of R8.1m changed hands.

On the second day of trading more than 100,000 shares valued at R7.8m were traded, with 79,000 calls to the call centre and 25,000 visits to the website.

However, on the third day of trading the system collapsed as a result of the "high demand" for these shares.

On 28 November, an MTN statement was sent out, promising that trading would resume on 2 December but on 1 December MTN released another statement saying that a new trading date would be announced on 5 December.

On that day, the company said that trading in ordinary shares would resume on 17 December via an online platform and call centre, provided system changes and testing processes prove successful.

But, MTN made yet another announcement about a further postponement of trading.

"I no longer want those shares and I want disinvest from MTN and channel my money to another company," Ndlovu said, adding that she had lost faith in MTN.

"After the latest postponement I want to sell my shares and invest in another company," she said.

Source: Sowetan via I-Net Bridge

Source: I-Net Bridge

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