The stock exchange company Labat Africa, whose shares are listed on the JSE, faced a trading suspension after the technology investment holding company failed to pay its first dividend in 27 years of its presence on the exchange.
In a notice published on Thursday, the JSE reported that Labat did not fulfill its obligation to pay the declared dividend according to the corporate action schedule, nor did it provide alternative mechanisms for transferring the full amount to Strate, the country's central securities depository, as required by the exchange.
The JSE noted that it had reviewed information from Labat regarding proposed alternative settlement options, but 'uncertainty remains regarding the settlement of the declared dividend.' The company initially objected to the suspension, but the exchange proceeded with the procedure, stating that it did so in the interest of shareholders.
The initial dividend was declared on June 23 at 1 cent per share. With 2.268 billion shares outstanding, the total amount was approximately 22.7 million rand, or 18.1 million rand after deducting a 20% withholding tax.
Upon declaring the dividend, management called it a 'milestone achievement,' reflecting a 'period of significant operational progress and value creation.' In the same announcement, directors confirmed that the company would meet liquidity and solvency requirements immediately after making the payment. According to Section 46 of the Companies Act, the board of directors is obliged to conduct such a check before authorizing the distribution of funds.
The schedule stipulated the last trading day including the dividend as July 28, the record date as July 31, and the payment date as August 3. However, on July 30, four days before the expected payment date and one day before the record date, Labat announced an extension of the implementation schedule.
The board of directors decided to align the dividend payment with the publication of the company's audited annual financial statements, which occurred after consultations with management and external auditors during the completion of the annual audit.