SacOil Scraps Plan to Sell Stock, Starts Probe of Share-Price Manipulation
Category: Frauds & Scandals
May 23, 2011 by Lauren van der Westhuizen
SacOil Holdings Ltd., an oil and natural gas explorer, dropped a plan to sell stock to selected investors and said it started a probe into movements in its securities amid concern about possible share-price manipulation.
While demand for the share sale was “substantial,” SacOil stopped the placing due to concerns it would dilute existing investors, recent moves in its shares and stock market volatility, the Johannesburg-based company said in a statement today. It has also raised concerns with the Johannesburg Stock Exchange about possible short-selling of its securities.
SacOil dropped as much as 22 cents, or 17 percent, its biggest intraday decline since Oct. 15, to 1.05 rand. It was trading at 1.24 rand as of 9:55 a.m. in Johannesburg, extending losses over the past three days to 16 percent, its longest losing streak since May 6.
The company’s major shareholders have assured SacOil that “they continue to support the company and have not been divesting their interests in SacOil,” it said. Chief Executive Officer Robin Vela said on April 12 that SacOil plans to raise as much as $100 million to accelerate the development of its projects in Nigeria.
Exploration at its Block III concession in the Democratic Republic of Congo is “progressing well” and no further capital outlay is needed, Vela said in today’s statement. SacOil is fully funded for the next year to carry out its exploration program at Blocks OPL 281 and OPL 233 in Nigeria, he said.