Noose appears to be tightening around alleged perpetrators as investigations move into high gear. From Moneyweb.
Mantengu Mining doubled to 100c last week after the company went public with its suspicions that its share price had been manipulated lower over a period of about eight months.
The shares have been on a steady decline – until the announcement came out a week ago.
Read: Mantengu Mining overrides JSE by issuing public warning on share manipulation
The shares changed hands below 50c prior to the announcement, falling to less than a quarter of the 220c it traded at in June 2023.
Post the announcement, the shares doubled to 100c by Friday.
Asked whether it plans to bring a civil claim against the alleged perpetrators, the company said it would first have to complete its own investigations. If its suspicions are proven true, it will then be up to the shareholders who suffered losses to bring a claim.
Mantengu reported its suspicions of share manipulation to the JSE and the Financial Sector Conduct Authority (FSCA). The JSE decided it was premature to issue a Sens notice, while the FSCA believes there is sufficient evidence to warrant further investigation. The company decided in the interests of transparency to bypass the JSE and issue its own public warning.
Evidence
Moneyweb asked to see evidence of the alleged share manipulation and was given access to the share trade logs for the last eight months.
The logs show several trades of less than a handful of shares well outside the day’s trading range.
“None of this makes any economic sense,” says Mantengu Mining chief financial officer Magen Naidoo.
“If you add brokerage and admin fees, these trades are being conducted at a substantial loss.”
The trades are in the names of different individuals, though Naidoo suspects they are acting in concert.
“If you are looking for proof of market abuse, look at the performance of the shares since we issued the announcement a week ago,” he says. “It’s obvious that the perpetrators have gone into hiding, though we are watching the situation very closely as we are not convinced that they won’t return.”
Read:
No getting away with manipulating share prices
ConvergeNet share manipulation case settled nearly 10 years later
If shareholders were to bring a civil claim against the perpetrators, the first problem is identifying them, and then proving that they were part of a conspiracy to collapse the share price.
Naidoo says the company has its own investigators on the case.
R500m facility
The chrome and platinum group metals (PGM) company last month secured a R500 million shares and warrants-for-cash facility from UK-based GEM Global Yield.
Mantengu’s ability to draw on this facility is in large part determined by the share price.
The agreement allows GEM to acquire warrants at a 400c strike price, which is well above the current market price. The alleged share price manipulation could theoretically slow down the rate of cash drawdown for expansion.
‘Calculated campaign’
“We believe this is a calculated campaign to manipulate our share price lower by certain actors trying to disrupt our growth plans and prevent us accessing the cash we need for what is a fairly aggressive expansion path,” says CEO Mike Miller.
The company would not disclose the identities of the suspected perpetrators but did say it is canvassing the market for investment opportunities in a highly competitive environment.
As Moneyweb reported last week, Mantengu in its present form is barely a year old. Its sole operational asset is Langpan, a chrome and PGM plant in Limpopo acquired in July 2022 for R550 million. A chrome processing plant was commissioned in May 2023, with a second due to come on stream in April this year.
As a start-up mining operation, the company has yet to report a profit but says in its 2023 annual report that it has sufficient funding to execute on its future expansion plans.
Mantengu was valued at R857 million at the time of its reverse listing in early 2023, but the share price plunge dropped its market valuation to below R80 million a week ago. Last week’s jump in share price puts the market cap back to R160 million.
