Resilient may institute further probe into alleged executive misconduct | Fin24
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Resilient may institute further probe into alleged executive misconduct

Aug 31 2018 16:28
Compiled by Lameez Omarjee

Real estate investment trust (REIT) Resilient [JSE:RES] said it will consider the contents of a letter from institutional investors, requesting a probe into allegations against the company.

This is according to a shareholder notice issued on Friday. BusinessLive this week published a letter from 10 institutional investors - which include the Public Investment Corporation, Allan Gray, Stanlib and Prudential Asset Management - requesting the probe.

Earlier this year Resilient commissioned an independent review following allegations in publicly circulated reports questioning the integrity of transactions and which suggested market manipulation.

The review found no evidence of executive misconduct or breaches of governance rules and policies by the REIT, Fin24 reported.

But, according to the letter dated August 8, institutional investors and stakeholders are dissatisfied by the way the board and management have dealt with allegations leveled against it.

“We note the efforts of the board and management of these entities to address these concerns. However, we do not believe that these have been sufficient to resolve the allegations and believe that the boards need to act more decisively to unambiguously address the concerns.”

The investors view the investigation not to be “holistic and comprehensive”. Concerns still remain about the “lack of independence and insufficient scope of the investigation” commissioned by Resilient, the letter read.

The investors also raised concerns that the review had not addressed all critical reports issued about Resilient since January 2018. They also noted that there are prior allegations made against Resilient and this is not the first instance of questionable conduct by the group of companies.

“As a result we believe that the current negative perception being attached to each of your companies can only be resolved through a full, transparent and independent forensic investigation of all allegations made against the companies, its directors and closely associated parties,” the letter read.

In response Resilient said its board would engage with the investors, the company’s major shareholders to determine “the appropriate course of action”. “Shareholders will be kept informed,” the notice read.

Resilient’s share price which opened at R56.62 on Friday was trading down 0.63% at R56.60 by 11:25.

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resilient  |  allegations  |  probe


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