Prosecutors drop bribery charges against Pinnacle director

JOHANNESBURG (Reuters) – South African prosecutors have dropped charges of attempted bribery against a director of Pinnacle Holdings due to insufficient evidence, sending shares of the small-cap technology company soaring.

The Specialised Commercial Crime Unit (SCCU) in March arrested Takalani Tshivhase on charges he allegedly offered a bribe to a senior police officer to win a contract.

Tshivhase has denied the charges and Pinnacle said at the time it had no reason to doubt him.

"The SCCU has come to the conclusion that the evidence presented is insufficient to provide a reasonable prospect of a successful prosecution. The charges against Mr Tshivhase will accordingly be withdrawn," the company said.

Shares of Pinnacle, which had been hammered after news of the charge against Tshivhase earlier this year, gained 41 percent to 13.90 rand by 1456 GMT.

News of the charges in late March knocked $135 million or 43 percent off Pinnacle's stock value in two days. Before the arrest was announced shares were worth 20 rand.

A separate probe into possible insider trading in Pinnacle shares was still going on, an official at the Financial Services Board (FSB) told Reuters.

"Yes, we are still investigating. We should hopefully finalise our investigation soon," said Solly Keetse, head of the Department of Market Abuse at the FSB.

The regulator launched a formal investigation after Tshivhase, Chief Executive Arnold Fourie and another director, George Wiehahn, all sold Pinnacle shares equivalent to about 1 percent of the company after Tshivhase's arrest.

Pinnacle announced news of his arrest 20 days after he was apprehended, during which time the three directors had sold shares worth a combined 28.6 million rand ($2.7 million).

Pinnacle said Fourie's 23 million rand share sale was a "forced sale" determined by the exercise of options, Tshivhase's sale had been requested months before his arrest and Wiehahn had also obtained permission for his trade.

(1 US dollar = 10.7065 South African rand)