April 11, 2019 / 10:24 AM / 3 months ago

South Africa clears 3 more accounts of Steinhoff insider trading

JOHANNESBURG (Reuters) - South Africa’s financial watchdog has cleared of wrongdoing three holders of accounts that traded Steinhoff shares ahead of a collapse in the retailer’s share price.

The accounts were among scores suspected of insider trading after Steinhoff’s stock turned volatile before it disclosed massive accounting irregularities in December 2017.

“We found no reason to believe that any of these shares were traded in contravention of the Financial Markets Act,” said Brandon Topham, divisional executive for investigation and enforcement at the Financial Sector Conduct Authority (FSCA).

In all, around 1.7 billion rand ($122 million) was traded ahead of Steinhoff’s announcement, the start of a downward spiral which has seen the firm lose 216 billion rand in market value.

The FSCA has now investigated and cleared 56 accounts over suspected insider trading of Steinhoff shares. The latest three cleared traded over 418 million rand in shares, it said.

Investigations into accounts where another 46 million rand worth of shares were traded are ongoing, the FSCA said, and updates on those would be issued at their conclusion.

A summary of a PwC investigation into the scandal released by the company last month shows at least $7.4 bln in fraudulent transactions, and it has yet to release financial statements for 2018 or 2017.

($1 = 13.9449 rand)

Reporting by Emma Rumney; editing by John Stonestreet

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