SECURITIES Commission of Zimbabwe (SECz) has opened a formal inquiry into possible share price manipulation by Imara Edwards (Imara) following a share price rally between October 2, 2012 and November 19, 2012, which the market contends was not driven by fundamentals but by individuals with inside knowledge of the company.
Seedco’s shares rose from 86 US cents per share on October 2, 2012 to a high of 95 US cents on October 10 in thin volumes.
The price was maintained at 95 US cents for a further 20 days, again sustained by low volume trades, when a large parcel of 450 000 shares was traded at 95 US cents per share in a book over transaction handled by Imara.
About 20 days later on November 19, Imara “booked over” another large parcel of 750 000 shares at 97,5 US cents per share after Seedco issued its interim trading results which showed a US$8 million loss for the half -year ended September 30.
Imara CEO Thedias Kasaira refused to comment.
Following the special bargain transaction, Seedco’s shares then fell to 94 US cents on November 20 and by December 11, the shares were trading at 68,5 US centsper share.
Sources told businessdigest the two large transactions and the share price movements during a short space of time raised the interest of the regulators amid fears someone could have been manipulating the share price.
Seedco widened its net loss in the six months to September to US$8,88 million against a loss of US$1,404 million in the comparable year ago period, on the back of delayed seed sales, weak demand for winter cereals and slow uptake of cotton seed.
Revenue was down 56% to US$13,2 million as there is traditionally little activity in the first half. Maize sales were down 41% to 3 989 metric tonnes, winter sales were down 52% to 2 617 metric tonnes while there had been no cotton sales at all.