Welkom Yizani, the broad based black economic empowerment (B-BBEE) scheme of Nasper’s Media24, has been served with a notice to bring its listing affairs in line with new regulations in the Financial Markets Act of 2012.
This has forced the Welkom Yizani sponsoring partner Media24/Naspers to entertain the idea of establishing its own licensed exchange to facilitate the trading of broad-based black economic empowerment (B-BBEE) shares issued by companies within the Naspers group. This will also affect MultiChoice’s B-BBEE scheme, Phuthuma Nathi.
This development is revealed in the latest Media24 financial results. The company notes that “The Registrar of Securities Services has indicated that all traditional over-the-counter trading platforms such as Welkom Yizani should bring their affairs in line with the Financial Markets Act of 2012.”
Welkom Yizani shares were listed in 2013 on an over the counter platform ran by Equity Express alongside other B-BBEE shares of the time like Phuthuma Nathi and African Bank’s Hlumisa and Eyomhlaba initiatives. MTN Zakhele came to establish its own over the counter trading platform and Vodacom’s Yebo Yethu was on the way. There would be a flurry of B-BBEE listings on over the counter platforms and it came into a regulatory void which exposed millions of B-BBEE shares investors to substandard service.
After spotting a regulatory gap from the emergence OTC platforms, the Financial Sector Conduct Authority (FSCA) -formerly Financial Services Board (FSB) – sort to close the gap with a directive for over the counter trading platforms to apply for an exchange license. This saw MTN Zakhele shares and others move to the JSE empowerment segment. Welkom Yizani and Phuthuma Nathi remained on the Equity Express platform presumably on a promise that the platform would gets its house in order. It seems to be failing if the Media24 statement is anything to go by.
The Media24 statement states that Welkom Yizani has been engaging with the FSCA to comply with the Act. “As part of this process MultiChoice and Media24 are investigating various options, including the establishment of a company Yizani Phuthuma Nathi (YPN), which has applied for an exchange licence to facilitate the trading of broad-based black economic empowerment shares issued by companies within the Naspers group.”
The company said during this process trading of Welkom Yizani shares on the current trading platform continues unchanged. “Welkom Yizani continues to build on the positive engagement it has had with the Registrar and remains committed to complying with any directives and/or conditions issued by the Registrar. It is exempted from complying with the FM Act for a period of six months after the Registrar’s decision whether to grant an exchange licence to YPN.”