Jewellery retailer Luxe Holdings, brickmaker Brikor, microlender African Dawn Capital and chrome miner Chrometco have missed the JSE deadline for submitting their annual financial statements and face the risk of suspension.
On Friday, the JSE announced several companies had breached listing requirements by not filing their annual results within the four-month deadline after the financial year-end.
The bourse said these companies now are “under threat of suspension and possible removal”, and it made the announcement “in the interest of shareholders”.
Suspension would mean investors in these companies would be unable to sell their shares, but the companies have until month’s end to rectify the breach.
Many of the companies that failed to release results are small caps with market capitalisations of less than R1bn. The governance breach adds to the reputation that many smaller listed companies are high risk.
The poor reputation of some small caps harms good-quality small caps, such as investment holding company Long4Life that struggled to raise capital on the JSE and delisted as investors tend to shy away from smaller firms.
Only one company gave the market reasons for missing the deadline and an estimate of when the results would be published.
Alt-X microlender African Dawn Capital, in an update to the market, explained it had met the SA Revenue Service in an alternative dispute process in June and negotiated to halve the R7.7m in taxes it owed and this process delayed results. It said it would release results and its annual report before month’s end.
In August, its auditor, Mazars, resigned. African Dawn said the reasons for Mazar’s resignation relates to its strategic direction and capacity as well as the company’s risk profile, following an internal evaluation of its client portfolio.
In 2017, the JSE publicly censured the niche financial services company for a misstatement of financial results in 2014, when the company was under different management.
Chrometco
Chrometco’s auditor, Moore Cape Town, resigned on June 27 due to a self-interest threat that “cannot either be addressed or mitigated to an acceptable level of risk”.
The miner, whose stock is worth 6c, last month placed its Black Chrome Mine business into business rescue. Sail, the holding company that owns 90% of Chrometco, is also in business rescue, a form of bankruptcy protection that keeps creditors at bay during restructuring.
Chrometco, which has a market value of R153m, has been working on a recapitalisation and restructuring plan since coming under severe financial pressure due to what it describes as the volatile chrome market and the effects of the pandemic.
The 19-year-old Johannesburg-based company did not respond to email requests for comment.
Luxe
Luxe was once known as Taste Holdings before it closed the Domino’s pizza chain, sold its Starbucks business and exited other restaurants businesses The Fish & Chips Co and Maxi’s, leaving it with jewellery stores.
Taste’s share price once reached highs of R5.25, but is now worth R2.60 having been as low as R1.15.
In October 2021, five of the seven directors of Luxe stepped down or moved into divisional roles. Since then there have been further leadership changes.
Suzanne Meyer was appointed to the Luxe board and in June made CFO. Meyer was CFO at embattled Nutritional Holdings, which remains suspended from the JSE with both its businesses non-operational and financial results from 2021 outstanding.
In June, a new chair was also appointed in what appears to be an attempt to address governance issues. CEO of the firm, Helena Grewar, was once chair at Nutritional Holdings.
She did not respond to requests for comment on why the results were late.
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