Mpact is taking its skirmish with its largest shareholder, Caxton, to competition authorities to rein in the publisher’s chair, Paul Jenkins, who has been accused of leaking sensitive information to the media.
The two companies are engaged in litigation over Caxton’s intended takeover of packaging manufacturer Mpact, in which the publisher already commands a 34% stake.
A spokesperson for Mpact told Business Day that no date has yet been set for the tribunal hearing.
Business Day understands that Jenkins was in August served with a notice of motion to apply to the Competition Tribunal for a gag order against him that would force him to desist from disclosing confidential information.
Mpact also wants the matter to be heard urgently, according to the papers filed in August.
The paper-and-plastics packaging business and recycler accuses Jenkins of using the Moneyweb platform, on whose board he sits, to repeatedly share private information that he was prohibited from repeating, even to his board.
It said the chair’s allegations that the information he is privy to is “price sensitive” and will therefore have a material effect on the share price of Mpact, are in breach of the binding confidentiality agreements.
“Mr Jenkins has publicly admitted he wants the information publicly released to reduce Mpact’s share price, thereby making purchasing a controlling stake in the company cheaper for Caxton,” the legal papers read.
“This, Mpact submits, is an abuse of the tribunal process.”
At the heart of the impasse between Mpact and Caxton is how the proposed merger and offer should be made by the potential buyer.
Given assurance
Mpact wants an offer on the table, while Caxton said it wants a pending case before competition authorities over alleged cartel behaviour to be completed before it finalises any offer.
Mpact, however, has given the assurance that there is no reasonable cause for concern as authorities are not seeking to impose a penalty on Mpact.
Caxton has alleged that Mpact is soliciting support from its competitor, Golden Era, to oppose its merger and that it filed “secret representations” and affidavits with competition authorities, adding to Caxton’s concerns that Mpact and Golden Era “remain involved in the vestiges of their long-standing cartel”.
In August Caxton said it was considering legal action against the board of Mpact over CEO Bruce Strong’s comments about Caxton’s vote on the pay of non-executive directors at Mpact’s AGM in June.
In the latest tussle, the respondents were given until August 26 to respond and Jenkins filed an affidavit denying he had breached any tribunal order.
“Caxton’s view is the information must be disclosed to all shareholders, and we have asked the JSE to intervene,” he told Business Day. “At the very least, the shareholders must be given the same facts and the Mpact board must explain why its executive directors were selling shares when in possession of information that is apparently so secret and commercially sensitive that an urgent interdict is sought to suppress the information.”
Mpact shares closed down 3.66% at R27.93 on Friday, while Caxton shares ended 2% lower at R9.31.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.