Steinhoff, Brait Share Movements Probed for Insider Trading

Dealings in shares in Steinhoff International Holdings Ltd. and Brait SE are being investigated by South African regulators as part of an insider trading probe.

Steinhoff stock transactions are being examined between September and November, the months leading up to the retailer’s announcement of its 62.8 billion rand ($5.2 billion) acquisition of Pepkor Holdings Pty Ltd., South Africa’s Financial Services Board said in a statement dated June 23. Trading in Brait, the investment company that bought British fitness chain Virgin Active in April, is also being probed.

The FSB is investigating “individuals who were privy to price sensitive information and who traded ahead of the announcements,” Solly Keetse, head of the Pretoria-based regulator’s Directorate of Market Abuse department, said by phone on Thursday, without giving more details on what’s suspicious about the trading activities. The DMA’s next quarterly meeting will be held in September, where an update on the investigations will be given.

“It should be noted that these investigations are not into the affairs of the companies listed but into trading of shares on the stock exchange,” the FSB said.

Brait shares gained 2.9 percent on April 14, two days before the 682 million-pounds ($1.1 billion) Virgin deal was announced. That was the stock’s biggest daily advance since Jan. 21, according to data compiled by Bloomberg. The company, controlled by billionaire Christo Wiese, agreed to buy British retailer New Look for 780 million pounds the following month.

Steinhoff didn’t issue a cautionary statement before the Pepkor deal was announced, a regulatory requirement that serves to inform investors that talks are taking place that could affect the share price. That decision was questioned by Charl Kocks, principal at Johannesburg-based Ratings Afrika, The Sunday Times reported on Nov. 30. Steinhoff took advice and was told it wasn’t necessary to issue a statement, Chief Executive Officer Markus Jooste said in the same report.

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