On 15 March 2021 the Financial Sector Conduct Authority (FSCA) confirmed that it had registered an investigation regarding transactions in Huge Group Limited securities, with a specific focus on transactions concluded during the period from 1 December 2020 to 28 February 2021. The FSCA said in a statement today that it is aware that Huge Group Limited has given notice that it intends to acquire all the issued shares of Adapt IT Holdings Limited (Adapt IT) in a share for share transaction on the basis of 0.9 Huge share to be offered for each Adapt IT share tendered, and undertook to disclose its findings as soon as possible.
The FSCA advises that:
- It has concluded that there is insufficient evidence to find that repurchase transactions by Huge Group Limited during the investigation period constituted Prohibited Trading Practices as defined in Section 80 of the Financial Markets Act No 19 of 2012.
- This finding is not an endorsement, affirmation, or an expression of opinion regarding the fair value of the Huge share price.
- Should any new information come to hand that may warrant these transactions to be revisited, the FSCA could again investigate these transactions.
- The investigation will remain open whilst the FSCA continues to investigate other transactions in Huge Group Limited securities that may constitute Prohibited Trading Practices.
“The FSCA further wishes to advise that it has registered an Insider Trading Investigation (Section 78 of the Financial Markets Act No 19 of 2012) that will cover disclosures and transactions in Huge Group Limited securities during January 2021.
“Lastly, we intend to engage with the licensed exchanges and the broader market regarding the rules applicable to share repurchase programmes. The aim will be to gather information on whether the present rules provide sufficient investor protection when a listed company is significantly the largest purchaser of its own thinly traded shares. This is because the consequences, as in this case, may be to affect a share price. This is a matter of concern for us as Regulator of the financial markets.”
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