Johannesburg - The Securities Regulation Panel (SRP) would oppose Verimark's delisting from the JSE, the watchdog organisation said.
The proposed delisting of Verimark, which specialises in direct marketing and sales of a variety of consumer goods, unleashed a storm because minority shareholders apparently had had no say in the matter.
The Verimark minority shareholders were excluded from the voting process during which the scheme of arrangement for delisting Verimark was approved.
In terms of the scheme, the majority shareholder - the Van Straaten Family Trust and related parties - would buy 36% of Verimark's shares from minorities at 50c a share, and then delist it.
The majority shareholders voted in favour of the delisting, while 69% of the minority shareholders voted against it.
This violated the generally-held rule that majority shareholders and related parties do not vote in the case of takeovers.
SRP director, Richard Connellan, said this was in direct conflict with the interests of minority shareholders. On this basis, the SRP opposed the scheme of arrangement, or alternatively the votes of the majority shareholders should be discounted.
Should the court approve the scheme of arrangement, this would create a precedent for further delistings and takeovers where the interests of minority shareholders were ignored.
A portfolio manager who declined to be named said Verimark's tactics reminded him of the bully in the playground.
The way in which Verimark had approached the delisting was also in conflict with the Companies Act which comes into force next year. In terms of the new act the party during the takeover has no voting rights.
In 2005 Verimark's shares were listed on the JSE at R2.50 each, in terms of which the CEO, Mike van Straaten, received some R100m.
The majority shareholders planned to execute the transaction at 50c a share. Verimark's share closed at 45c last week.