Trading Halt in Biggest Botswana Grocer to Be Probed by JSE

(Bloomberg) -- The Johannesburg Stock Exchange will investigate why it wasn’t informed of a trading halt in Botswana’s biggest grocer until long after the securities were suspended by its counterparts in Gaborone.

About 6 million shares traded in Choppies Enterprises Ltd. on the Johannesburg market before the announcement at 12:47 p.m. local time on Thursday that the securities have been suspended, according to data compiled by Bloomberg. The Botswana Stock Exchange had announced a halt pending an announcement of a delay in the company’s audited financial statements just before 10 a.m.

“We suspended the moment that we knew, the inference you can take from that is that no one told us,” John Burke, director of issuer regulation at the JSE, where Choppies has a secondary listing, said by phone. “We have to now figure out who is at fault, was it the exchange, the sponsor or the company.”

The suspension was lifted at about 1:42 p.m. after Choppies said it is unable to determine when it will publish its audited earnings statements. The company’s board and new external auditors, PwC, had “identified matters relating to the current and earlier financial periods which require independent verification and expert legal analysis.”

The stock closed 4.2 percent higher in Johannesburg, with almost 16.7 million shares changing hands. The securities plunged 75 percent on Tuesday, when the company said its results are taking longer than anticipated to finalize and that earnings will probably drop by more than a fifth. The stock’s volatility continued Friday as it jumped as much as 40 percent, before trading 36 percent up as of 3:38 p.m., paring declines this year to 77 percent.

The Botswana Stock Exchange informed Choppies of the trading halt and it is the responsibility of the company to inform other markets on which it is listed, the bourse said in an emailed response to questions. Choppies declined to comment.

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