- February 23, 2012
- Posted by: admin
- Category: Clothing and Textiles
The Seardel share price jumped 10c to close at 99c yesterday following speculation that the group was set to recover a significant amount of R300 million that was the subject of a legal battle with former directors of the company, including Aaron Searll, who was the founder and the firm’s long-serving chief executive.
The pending recovery of the assets involved in the three-year legal battle is believed to be the subject of a cautionary announcement issued by the clothing manufacturer on Friday.
Yesterday, market sources indicated that the amount recovered could be significantly more than the R120m that was being touted on Friday.
In the group’s 2009 annual report, Johnny Copelyn, who had been appointed Seardel chairman shortly before, noted that the board had commissioned an extensive forensic audit of past conduct.
“In consequence the group has launched an action consisting of various substantial claims for relief, the total value of which is some R300m against former directors of the company and its subsidiaries, primarily related to personal property transactions, the opportunity for which the company believes ought to have been passed to the Seardel Group.”
The dispute was headed for courts until the two sides agreed to arbitration, which means that the precise details of the assets being disputed have not been made public.
In October Copelyn told shareholders at the Seardel annual general meeting that the arbitration process was expected to be completed within the first quarter of 2012.
Success in recovering the claim will enhance the value of an asset that the Southern African Clothing and Textile Workers’ Union (Sactwu) invested R200m into in 2008/09.
The Sactwu investment was undertaken through Hosken Consolidated Investments (HCI), which secured control when it underwrote a Seardel rights issue at 50c a share.
The trade union is the largest shareholder in HCI with a 38 percent holding.
Source: Business News – Ann Crotty