By Philippa Larkin
JOHANNESBURG – Delta Property Fund tumbled nearly 21 percent yesterday after the black-owned property group warned shareholders that circumstances had arisen that were being investigated by the board, which might have a material effect on the price of its shares.
Delta advised investors to exercise caution on the company’s securities.
Speculation was rife on social media as to the reasons behind the JSE SENS statement and possible “skeletons in the closet”, considering that the company surprised the market with the immediate resignation of three top founding executives last month.
However, Avior Capital Markets analyst Daniel King said few facts were offered in the SENS announcement.
“It thus may be premature to link the latest development directly to the departure of the executive team. However, to the extent that further investigation by the board is required, the range of potential outcomes tends to vary between neutral (at best) to negative for shareholders. It is rare for positive news to be concealed by management,” King said.
Last month, founding chief executive Sandile Nomvete and chief financial officer Shaneel Maharaj left with immediate effect, and Otis Tshabalala elected to not complete his notice period.
In July, Tshabalala resigned as chief operating officer and chief investment officer. Bongi Masinga was appointed as acting chief executive.
However, analysts at the time put the resignations down to failed merger talks with Rebosis Property Fund.
In March, Delta and Rebosis ended merger talks for the second time to create a R29billion property titan.
Non-executive deputy chairperson Phumzile Langeni Phumzile Langeni said the resignations were in line with the group’s new strategy.
Langeni said shareholders and the largest shareholder, Cornwall Crescent, wanted an element of change.
Delta’s property portfolio was valued at R10.6bn for the year ended in February.
Its shares closed 17.65 percent down at 28 cents.