Thom McLachlan

GOLD Reef Resorts CEO Steven Joffe says the Securities Regulation Panel (SRP) has written to him, asking him to explain his sale of single stock futures while the company was in negotiations that might have resulted in it being sold.

“We were not under cautionary at the time,” Joffe said on Friday.

“I did not know that I had to get permission from the SRP.”

Joffe is said to have gained R17m from the sale of the futures at R33 a share.

Gold Reef’s current share price of R23 is substantially lower following the withdrawal earlier this month of an offer for the company by a private equity consortium of R34 a share.

The consortium comprised Gold Reef Management, Ethos Private Equity and US bank Goldman Sachs.

Joffe said shareholders had already voted overwhelmingly in favour of the company’s sale to the private equity consortium when he decided to sell the futures, and the derailment of the deal was “completely unexpected”.

The deal was scuppered after Gold Reef failed to get approval from various gambling boards.

This followed the SRP’s hearing on rival group Tsogo Sun’s claims to the SRP of an irregular payment to chairman Maxim Krok and an offer by Tsogo of R34,50 a share that was at no time communicated to shareholders.

Gold Reef is now trading at well below the price it was when Joffe sold the futures. “This was all announced to the JSE and to shareholders at the time.” Joffe said he was “unsure as to why” it was being raised four months later.

He said he was “devastated” by the collapse of the Gold Reef sale. “This was an incredible offer for shareholders…. It pains me that competitors could ruin such a good deal,” he said.

Late last week, Gold Reef announced that nonexecutive director Reuel Khoza had resigned from the board with effect from last Wednesday.

Joffe said Khoza’s resignation related to workload issues. He said that no shares had been sold on behalf of nonexecutive directors.

Source: Business Day