Trustco Group, an investment holding majority owned by Namibian businessman Quinton van Rooyen and his family, has won a round in court against the Johannesburg Stock Exchange (JSE).
The Pretoria High Court ruled that the company may not be suspended from the JSE until the hearing of its review application in September.
The presiding judge, Nicoline Janse van Nieuwenhuizen, pre-dismissed every argument made against Trustco. The judge issued a decision, in which she ordered the JSE to be interdicted and restrained from suspending Trustco shares from trading on the local bourse.
“The grounds of review are all deserving of a proper hearing in due course, and I am satisfied that Trustco has asserted a prima facie right to fair and just administrative action,” she said in her decision.
In response to the news, shares in the group rose 35.56 percent to R0.61 ($0.0367), from a price of R0.45 ($0.0271) at the start of trading this morning.
The increase in Trustco’s share price pushed its market capitalization above R985 million ($60 million) and the value of van Rooyen’s 63.94-percent stake above R630 million ($38 million).
The court also prohibited the JSE from implementing or attempting to implement the decision that Trustco restate its annual financial statements for the fiscal year ending March 31, 2019, as well as the interim results for the six months ending Sept. 30, 2019.
The legal battle between Trustco and the JSE began on Nov. 11, 2020, when the exchange’s authorities claimed that the company had not met the listing requirements for its 2019 annual financial statements and 2020 interim results.
As part of the allegations, the JSE accused Trustco of violating international accounting standards by misrepresenting features of two loans and reclassifying land that it owns.
Trustco questioned the JSE’s authority to order corporations to amend their financial statements. It claimed that only boards have that authority and stated that all transactions had been “exactly accounted for, reported, and disclosed.”
Amid the legal battle between Trustco and the JSE, wary local bourse investors sold their stakes in the company, fearing a potential delisting of its shares, which caused the share price to crash to an all-time low in July before rebounding recently by double digits.