Whoops – now MTN Zakhele shareholders are told: No trade today, working on it and let you know Thursday

MTN Zakhele’s disastrous start to life as a traded entity took a turn for the worse when it announced today’s proposed re-opening of trading won’t happen after all. A statement from the company says it will only be able to tell its 120 000 shareholders on Thursday when the trading platform will re-open after a stuttering attempts early last week. The company continues to spin its problem as a result of being overwhelmed by the response. But only 93 000 shares worth R8m traded before the system ran out of capacity – a fraction of what even a small trades daily on the JSE.  After all the pre-listing fanfare, this is turning into a reputational nightmare. It follows the directors’ decision to appoint a little-known, inexperienced foreign firm to handle the technical side. The MTN Zakhele trading meltdown brings new focus onto the next big BEE share OTC listing, next Monday’s flotation of Media24’s Welkom Yizani. With 106 000 shareholders, Welkom Yizani is of a similar size. But unlike MTN Zakhele, the Media24 scheme has opted to list with South African-owned and developed Equity Express whose platform has successfully transacted more than R1bn for BEE schemes offered by Multichoice, Sasol, Abil, Imperial and others. How well its systems cope with that new listing will provide an excellent gauge of whether local is indeed lekker.  – AH    

Press Release from MTN Zakhele:

Trading in ordinary shares in the R13.8 billion broad based black economic empowerment (BBBEE) scheme operated by MTN Zakhele (RF) Limited (MTN Zakhele), which owns 4% of MTN Group Limited’s (MTN) total issued ordinary shares, launched on Monday 25 November. Due to the unprecedented interest in buying and selling these shares, MTN Zakhele suspended trading on Wednesday 27 November to add capacity and re-test the system prior to the resumption of trade. An announcement will be made this Thursday, 5 December, as to when trading will resume on the online platform and call centre.

“With the additional capacity that we are adding and changes we are making to our system, we are confident that the system will be able to accommodate additional volumes, but we must complete thorough testing before we resume trade.   We believe that this is in the interests of all users. We have also taken steps to increase capacity at the call centre to handle an increased volume of calls. The team continues to work round the clock so that we can complete our testing as soon as reasonably possible,” says MTN Zakhele Chairman Thulani Gcabashe. “We will be in a better position to make an announcement by Thursday this week.”

Even with trading suspended, registration is still possible on the website and the call centre. Forms are also available for download on the website.

The MTN Zakhele shares closed at R80 per share on Tuesday,26 November. All trades that took place prior to the suspension were efficiently matched and settled. In addition, all funds received have been allocated to trading accounts and the funds are held in a separate bank account established for this purpose.

“While we regret any inconvenience which users may have experienced, the level of interest remains good news for shareholders as the trading price of the shares depends on demand on the trading platform and liquidity,” says Gcabashe. “With this level of interest, this will continue to be a truly successful scheme.”