Posted by Ann Crotty | 6 December 2017 | 1,348 times
Naspers’s hopes of a speedy resolution to the high-profile controversy around payments its 80% subsidiary MultiChoice made to SABC and ANN7 were dealt a hefty blow on Tuesday when a US law firm, specialising in class actions, announced it was investigating the company.
Pomerantz issued a statement in New York saying it was investigating claims on behalf of Naspers’s investors.
“The investigation concerns whether Naspers and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices,” Pomerantz said.
The law firm, which has been described by some US-based investors as the corporate equivalent of an ambulance chaser, has invited Naspers shareholders to join a class action. It pioneered corporate class actions and has been involved in many high-profile cases. “They’re not always successful but these are people you don’t really want looking into your business,” said an analyst.
The firm did not respond to queries about the level of support it had received.
In its statement, Pomerantz referred to MultiChoice’s decision to initiate a probe into whether improper payments were made to television station ANN7. There was no reference to MultiChoice’s payments to the SABC.
Although Naspers is listed on the JSE and does not have a secondary listing on any other market, the US firm is able to contemplate action on the basis of Naspers’s American Depositary Receipts (ADRs).
Pomerantz said these fell 5.6% on December 1.
It is unclear whether the action is restricted to holders of Naspers’s ADRs or is accessible to all shareholders.
Naspers spokeswoman Meloy Horn said this type of release from law firms was not uncommon in the US following announcements related to listed entities. “They don’t mean any legal proceedings are under way or will happen, and we have not been informed of any legal action from any of our investors,” she said.
•Sourced from Business Day SA.
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