Mantengu slams FSCA probe as incomplete, demands deeper investigation
Key topics:
FSCA probe into Mantengu's complaint was limited in scope and duration
Key evidence and broader trade data were not reviewed by the FSCA
Mantengu questions FSCA’s exoneration of JSE; Hawks probe is ongoing
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Mantengu Press Statement on FSCA findings
26 May 2025 - Mantengu acknowledges the FSCA’s press release of 23 May 2025, which outlines the outcome of its investigation into Mantengu’s complaint regarding alleged share price manipulation.
While Mantengu has not yet received the full report from the FSCA, the press release indicates that the investigation was narrowly scoped in the following respects:
Limited review period: The investigation covered only nine months (1 June 2023 to 16 February 2024) out of Mantengu’s 24-month review period, addressing just one aspect of the alleged manipulation strategy.
Restricted trade analysis: Only the sample trades flagged by Mantengu were examined, highlighting that no trades were identified or referred to the FSCA by the JSE. This raises concern about the JSE’s monitoring and surveillance of the trading activity in Mantengu’s shares.
Incomplete investigation: The FSCA did not conduct a holistic review of Mantengu’s complaint, omitting numerous other trades Mantengu considered suspicious but did not explicitly highlight at the time.
Narrow focus on short selling: Mantengu’s complaint was not about isolated short selling – which is legal in South Africa – but rather about alleged collusive and systematic manipulation by a syndicate to depress the share price.
Without examining these links, the FSCA’s findings remain incomplete.
Exclusion of critical evidence: The FSCA did not review the electronic devices seized by the sheriff of the High Court from Liberty Coal’s CFO under the supervision of an independent attorney pursuant to an Anton Piller Court Order, despite being informed of its relevance. The seizure was intended to preserve the evidence for review by the court, the FSCA and SAPS.
Mantengu notified the FSCA of the paramount importance of this information to prove the collusive manipulation and stressed that no definitive outcome could be finalised without this critical information. The FSCA made it clear to Mantengu, during the interviews of Mantengu’s CEO and CFO, that Mantengu needed to be realistic about its expectation of the FSCA to fully investigate the matter due to budget and resource constraints.
Unsubstantiated clearance of the JSE executives: The FSCA’s statement exonerating certain JSE executives is puzzling, as Mantengu’s original complaint did not allege criminal misconduct by them. The FCSA concluded its investigation on 29 January 2025, prior to Mantengu’s 31 March 2025
criminal complaint involving JSE executives. The basis of this clearance remains unclear.
Ongoing Hawks investigation: While the FSCA has cleared certain JSE executives, Mantengu has requested the Hawks to investigate whether they enabled manipulators by failing to detect suspicious activity. Given FSCA’s limited scope, Mantengu questions the validity of this exoneration but welcomes the FSCA’s commitment to cooperate with the Hawks.
JSE’s role in share lending: The FSCA has exonerated the JSE despite its involvement in permitting the borrowing of a Mantengu shareholder’s shares to cover an alleged naked short position. Mantengu will scrutinise this specific trade in detail once it receives the full FSCA report. A recent
incident - following Mantengu’s 8 May 2025 SENS announcement – revealed that 1.8 million shares were taken without consent or any signed scrip lending agreements. In such instances, Mantengu’s shareholder base is losing significant value due to recurring governance breaches.
Mantengu notes the timing of the FSCA’s press release, which coincides with media reports regarding the Hawks’ investigation into certain JSE directors.
“Mantengu awaits the full FSCA report and will consult its corporate and legal advisors to assess whether a High Court review of the findings is warranted, given the investigation’s limited scope. The outcome does not impact Mantengu’s criminal complaint and ongoing investigation. Contrary to some narratives, Mantengu is not seeking to discredit the JSE or FSCA. As a responsible corporate citizen,we are committed to ensuring market integrity - whether concerning people, systems, controls or regulatory frameworks. Several other listed companies have approached us with similar concerns, reinforcing the need for thorough scrutiny.” said Mike Miller, the CEO of Mantengu.
Mantengu remains steadfast in upholding the highest standard of ethics and governance in serving its shareholders and stakeholders. The board recognises the broader implications of these issues and will continue to act in the interests of corporate and public accountability. A further update will be provided upon receipt of the FSCA’s full report.