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Pinnacle moves to reassure market
Pinnacle has moved swiftly to reassure the market following the mention of one of its subsidiaries, Pinnacle Micro, in a court case against SANDF General, Leon Eggers who is facing three charges of bribery and corruption dating back to 2008.
In the commercial crimes court in Pretoria, the State alleges that since 2008, Eggers had accepted invitations on five hunting trips from Pinnacle Micro and Kestrel Network Solutions, as well as a fishing trip in 2009. It also alleges that Eggers accepted a trip to a rugby game in Scotland in 2013 from the two companies.
Yesterday, the market reacted sharply to the reports that surfaced over the weekend and Pinnacle’s share price fell from R18.88 to R14.40. It has since recovered this morning to R15.59, due mainly to Pinnacle’s swift response in issuing a SENS statement around the allegations.
As Pinnacle CEO, Pierre Spies stresses, Pinnacle has not been charged with any offence. But the fact that senior executive Takalani Tshivhase was charged with bribery two years ago – and the then executive’s tardy response to this – has obviously set the market on edge. Tshivhase was subsequently found not guilty on all charges.
Spies says that the company has conducted its own internal investigation over the latest allegations and found nothing untoward.
“We’ve got nothing to hide,” Spies says, “and we will work with authorities wherever it is warranted.”
Analysts say that the quicker response in this case has helped to appease fears among investors. One analyst has even suggested that it may be a good time to buy the stock.
The full SENS statement released by Pinnacle yesterday afternoon reads as follows:
Pinnacle shareholders are advised that Pinnacle Micro (Pty) Ltd, a major subsidiary of Pinnacle, previously trading as “Pinnacle Africa”, has been mentioned in the charging and
court appearance of Brigadier-General Leon Eggers (“Eggers”) of the South African Defence Force (the “Department”).
Eggers is accused of favouring Pinnacle Africa and another supplier in the award of business, by using his official position to obtain from them private gifts or benefits for himself during the performance of his duties.
Pinnacle Africa dealt with Eggers and the Department over a number of years and in the same manner as any other customer. Pinnacle Africa networks with its customers and invites customers to many events, including sporting events, at Pinnacle Africa’s expense. Pinnacle Africa has never requested nor expected nor received, any special treatment or favours from any of its customers, in return for any such entertainment provided by it, and it would never do so.
Pinnacle will keep shareholders informed of any developments in this matter.