Faulty Trading Notice a ’Clerical Error’, Comair SaysRene Vollgraaff
Comair Ltd., which operates British Airways flights in South Africa, said it completed an incorrect form provided and then issued by Rand Merchant Bank that caused the stock to rally to the highest in almost six years yesterday.
Comair released two separate statements on the Stock Exchange News Service of the Johannesburg bourse yesterday, saying that directors Atul Gupta and Ronald Ntuli bought shares worth a combined 86 million rand ($8.4 million), causing the stock to jump as much as 15 percent, the most since February. Five hours later, it issued a correction that the directors had sold securities, pushing Comair 1.3 percent lower at the close.
“Part of it was just a clerical error in terms of the form that was completed for directors’ trading, it was a template for the purchase of shares, not a template for the sale of shares,” Comair Chief Executive Officer Erik Venter said by phone today. “That was probably a fault on our side and then obviously we do also hold RMB partly responsible because they are the sponsors. They should have actually checked that the SENS announcements were correct before approving it.”
Rand Merchant Bank, the investment-banking unit of FirstRand Ltd. and Comair’s sponsoring broker, declined to comment, referring queries to the Johannesburg-based airline. Comair owns low-cost operator kulula.com. The Johannesburg Stock Exchange is investigating the incident and relies on companies and their sponsors to confirm information is correct, Michelle Joubert, the head of investor relations, at the bourse, said in an e-mailed response to questions.
The company’s shares soared to as much as 3.45 rand, the highest on an intraday basis since January 2008, according to data compiled by Bloomberg. Then they fell back to below 3 rand after the statements were corrected with 1.9 million changing hands during the day. Most of the stock was exchanged at 3 rand, Venter said.
“The volume that went up to 3.45 rand was minuscule and I do not honestly think it would have made a difference either way,” Venter said.
Comair’s shares gained 6.4 percent to 3.15 as of 12:24 p.m. in Johannesburg today. The company on Nov. 4 bought back equities worth 89.6 million rand, representing 6.1 percent of its issued securities, at between 2.90 rand and 3 rand, it said in a statement today.
The sale by Gupta cut his holding in the business to zero, Johannesburg-based Business Day newspaper reported today, citing Venter.