THE FINANCIAL SERVICES TRIBUNAL
CASE NO. JSE2/2025
In a matter between:
TRUSTCO GROUP HOLDINGS LIMITED APPLICANT
and
JSE LIMITED RESPONDENT
TRIBUNAL PANEL: MF Legodi JP (Panel Chair), F Kgomo JP and C Pretorious J.
Appearance for Applicant: J Daniels SC
Appearance for Respondent: Ian Green SC
Date of hearing:14 August 2026
Date of Decision: 20 August 2026
Summary: Application for reconsideration of public censure and R5 million financial
penalty imposed on the applicant by JSE , for contrave ning paragraph 9.20 (b) of the
Listing Requirements . The contravention was not in dispute. The application was
dismissed because the decision-maker could not be found to have exercised its discretion
improperly.
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DECISION
Introduction
1. This is an application for reconsideration launched in terms of section 230 of the
Financial Sector Regulation Act 9 of 2017. The application is for reconsideration
of a decision taken by the Johannesburg Stock Exchange (JSE) on 17 September
2025.
2. In terms of the decision, Trustco Group Holdings Limited (Trustco) was p ublicly
censured and directed to pay a penalty of R5 million for its contravention of the
Listing Requirements. The decision in respect of the public censure and penalty
was published on 3 October 2025.
Background
3. On 1 August 2022, Trustco’s wholly owned subsidiary companies, Meya Mining
(Meya) and Germinate, concluded a term sheet agreement with SJSC Investment
Limited (Investment Co). In terms of the agreement, Investment Co was to have
an option to subscribe for a sufficient number of shares in Meya to potentially
acquire up to 70% shareholding for a maximum subscription amount of 50 million
US dollars. Trustco’s subsidiaries, referred to in paragraphs 4 and 5 hereunder,
were to dispose of shareholding equivalent to 25 million US dollars each to
Investment Co. The arrangement is referred to herein as the “Transaction”.
4. Meya is a company registered in the Republic of Mauritius . During 2021, it held
and operated a diamond mine within the eastern part of the province of Sierra
Leone.
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5. Trustco held 65% of the shareholding in Meya through its own subsidiaries
referred to as Trustco Resources , also registered in Mauritius , and Trustco
Resources Proprietary Ltd , registered in Namibia. The remaining 35% of
shareholding in Meya was held by Germinate, referred to in paragraph 3 above.
6. The value of the transaction referred to in paragraph 3 above, in respect of
Trustco’s portion, amounted to R460 000 000.00, representing 89% of Trustco’s
market capitalization. At the time , Trustco undertook to distribute a circular
containing the full details of the transaction, incorporating a notice convening the
required general meeting of Trustco’s shareholders for the purpose of the
approval of the Transaction.
7. However, upon investigation by the JSE, it transpired that Trustco’s two wholly
owned subsidiaries, namely, Trustco Resources registered in Mauritius and
Trustco Resources Proprietary Ltd , registered in Namibia, had already
commenced implementing the Transaction by disposing of their shareholding in
Meya before Trustco had distributed a circular to shareholders and before
shareholder approval could be obtained.
8. JSE found that this was contrary to the undertaking made by Trustco in its Stock
Exchange News Service (SENS) announcement on 4 August 2022 and
constituted a contravention of JSE Listing Requirements. SENS announcements
are real-time regulatory updates and price-sensitive corporate news published by
Companies listed on the JSE.
9. In addition, it was found that in its Annual Financial Statements for the year ending
31 August 2022 Trustco’s shareholding in Meya through its subsidiaries had
reduced from 65% to 55.75%. Furthermore, in Trustco’s last published results
for the year ending 31 August 2023, it was found that Trustco had confirmed that
its shareholding in Meya had in fact reduced further from 55.25% to 19.5%.
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10. JSE then concluded that , as a result, the Transaction whereby Trustco’s
shareholding in Meya had collectively reduced from 65% to 19.5% was
implemented prior to the shareholders’ approval. This was found to be contrary
to the provisions of paragraph 9.20(b) of the Listing Requirements. This came to
the attention of JSE only in March 2023. Paragraph 9.20(b) provides:
“9.20 Upon the terms of a Category 1 transaction being agreed, the
issues must:
(b) within 60 days dispatch a circular to shareholders
containing a notice of a general meeting to obtain their
approval and any agreement affecting the transaction
must be conditional upon such approval being obtained.
The JSE may, in its sole discretion, extend this period
provided that there is sufficient justification to do so.”
11. Paragraph 9.20(b) required Trustco, as a listed company, to immediately publish
a SENS announcement upon agreeing to the terms of a transaction, dispatch a
circular to shareholders within 60 days containing the full details of the transaction
and a notice of a general meeting to obtain shareholders’ approval, and ensure
that any agreement effecting the transaction as a Category 1 transaction was
conditional upon approval.
12. The contravention of paragraph 9.20 (b) of the Listing Requirements is not the
subject of a dispute in these proceedings. What is in dispute before us is the
sanction imposed on Trustco.
13. A Category 1 transaction applies where any percentage ratio is 30% or more, or
where the total consideration is not subject to any maximum. On the other hand,
paragraph 10.4 (f) (ii) of the Listing Requirements obliges an issuer proposing to
enter into a related party transaction to include a statement by the board of
directors confirming whether the transaction is fair insofar as the shareholders of
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the issuer concerned and that the board of directors has been so advised by an
independent expert acceptable to the JSE. The board of directors must obtain a
fairness opinion, which must be included in the circular prepared in accordance
with Schedule 5, before making this statement, unless the subject matter of a
related party transaction is one of the mineral assets and a competent person’s
report has been prepared in accordance with section 12 of the Listing
Requirements by an independent competent person and such report contains a
valuation.
Did JSE err in imposing a public censure coupled with a R5 million sanction?
14. Contravention of the JSE Listing Requirements involves failure by a listed
company or its directors to adhere to the rules set out by the Johannesburg Stock
Exchange (JSE), which are designed to ensure fair, orderly and transparent
markets. Breaches are categori sed into obligations, financial reporting and
market conduct.
15. Contravention may, amongst others, relate to late publication of information. This
includes failing to publish information on the Stock Exchange News Servi ce
(SENS) timeously, including financial results and key personnel changes such as
changes to the CEO, CFO, Company Secretary or auditor.
16. The contravention could also relate to related-party transactions. This may
include concluding transactions with related parties without prior disclosure,
board approval or shareholder approval required , as contemplated in
paragraph 9.20 (b) referred to in paragraph 11 above.
17. In this reconsideration application, Trustco does not dispute contravention of
paragraph 9.20 (b) of the Listing Requirements. As indicated in paragraph 4 of
Trustco’s written heads, the only question before the Tribunal is whether the
sanction of R5 million , together with the public censure imposed on Trustco, is
appropriate, proportionate and fair in the circumstances.
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18. Put differently, did the JSE err in the exercise of its discretion? The Tribunal will
only interfere with an exercise of discretion if it finds that the JSE was either
biased, did not act for substantial reasons, acted capriciously in the exercise of
its discretion, or reached its conclusion on a wrong principle. In Mwale & anor v
The Prudential Authority & another, (a reconsideration decision), this Tribunal
stated as follows:
“The ordinary rule is that a higher body is not entitled to interfere with the
exercise by a lower body of its discretion unless it: failed to bring an
unbiased judgment to bear on the issue; did not act for substantial
reasons; exercised its discretion ca priciously; or exercised its discretion
upon a wrong principle. There is no reason why we should not apply the
same approach during an application for reconsideration.”
19. It is not our intention to revisit or rehash the principles applicable to the proper
exercise of discretion. In its written heads, Trustco referred to section 167(2) of
the Financial Sector Regulation Act (FSRA) , which sets out factors to which a
decision maker is required to have regard when determining an appropriate
administrative penalty. These include the need to deter the would-be offenders
and or reoffending, the degree to which the person or entity has co-operated with
a financial sector regulator in relation to the contravention, and any other relevant
aggravating and or mitigating factors.
20. In terms of section 167 (2) (b) of FSRA, matters to which the responsible authority
must have regard to include the nature, duration, seriousness and extent of the
contravention, any loss or damage suffered by any person as a result of the
conduct; the extent of any financial or commercial benefit to the person, or a
jurisdiction person, arising from the conduct ; whether the person has previously
contravened a financial sector law ; the effect of the conduct on the financial
contravened a financial sector law ; the effect of the conduct on the financial
system and financial stability ; the effect of the proposed penalty on financial
stability; and the extent to which the conduct was deliberate or reckless.
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21. Whilst the JSE is not bound by the provision of section 167 (2) as it is not the
responsible authority referred to therein, the factors mentioned in paragraph 20
are relevant to consider when determining an appropriate sanction for a
contravention of paragraph 9.20 (b) of the Listing Requirements.
22. As correctly indicated by Trustco, in paragraph 4 of its written heads the question
is whether the public censure coupled with a R5 million administrative penalty is
appropriate.
23. In the alternative, Trustco seeks a reduction of the monetary penalty together with
such further relief as the Tribunal may consider just and equitable.
24. JSE is blamed for not properly weighing, or at all considering, the relevant factors
or otherwise. The R5 million sanction is said to be unexplained and unconnected
to any relevant factor and that the imposition of the penalty is accordingly arbitrary
or capricious.
25. These contentions are premised on the JSE alleged ly overstating and giving
undue weight to irrelevant or marginal considerations, and that the quantum of
the penalty is not supported by any discernible methodology or benchmark.
26. It is necessary to examine the factual basis, if any, upon which the contentions in
the preceding paragraphs are made. In dealing with what is referred to as
relevant and important mitigatory factors for purposes of reconsiderations,
Trustco makes mention of the difficult ies with compliance, continuous market
disclosure, the absence of investor harm, genuine attempts to comply,
cooperation with the regulatory process, the practical and commercial context,
the absence of dishonesty, fraud or market abuse, the failure to engage
adequately with Trustco’s mitigat ing submissions or factors, and that the
R5 million penalty is disproportionate and unsupported by any discernible
methodology.
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27. We do not intend to deal with all of the above in detail. The parties have
sufficiently dealt with all relevant factors in their papers and written heads of
argument. It will be sufficient to deal with some salient features and the essence
thereof.
28. As a starting point , the implementation of the transaction without compliance
cannot serve as a mitigating fact or simply because Trustco had attempted to
comply but failed because of whatever challenges it was confronted with. In fact,
proceeding with the implementation of the transaction in the face of non-
compliance is aggravating rather than mitigating.
29. In other words, the contention in paragraph 38.8 of Trustco’s written heads cannot
serve as a mitigating factor. The contention is that , having discovered during
March 2023 that Trustco breached the provisions of paragraph 9.20(b) of the
Listing Requirements, JSE only classified the Transaction as Category 1 on
17 July 2023, more than four months later , and that given the mine’s urgent
capital requirements and the time taken to issue the categori sation ruling,
delaying implementation pending full compliance would have jeopardi sed the
mine and would have been commercially irrational. Trustco cannot rely on this
point because, during July 2022, it had already commenced implementing the
transaction.
30. What is referred to as a ‘ continuous market disclosure’ is also relied upon as a
challenge to the imposition of the financial penalty. It is contended that the market
was continuously informed of the transaction and its status between 4 August and
2 September 2024. By this stage, however, the horse had already bolted. The
transaction had long been implemented without complying with the imperative in
paragraph 9.20 (b) of the Listing Requirements.
31. There is a reason for the requirements of SENS announcements by entities listed
in the JSE and for the information to be made available to the public in general.
in the JSE and for the information to be made available to the public in general.
Openness and compliance with the Listing Requirements , such as
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paragraph 9.20 (b), are critical. They are intended to ensure that everything is
done above-board and consistent, and to protect shareholders, the public,
investors and the integrity of the entities participating in JSE activities.
32. The suggestion that the JSE directed that a shareholders’ meeting be convened
to ratify the transaction, which had already been prematurely implemented, did
not, in our view, diminish the serious nature of the contravention. To conclude or
suggest that the contravention was not so serious because shareholders retained
their voting rights and the harm was remediable is, in our view, not an excuse. It
is concerning that Trustco adopted this stance. Such an app roach has the
potential to set a bad precedent.
33. Trustco also relies on the absence of investor harm as a sufficient mitigating
factor to justify interference with the exercise of the JSE’s discretion in imposing
a fine of R5 million.
34. In dealing with the contention above, Trustco, amongst others, refers to the case
of Jooste v JSE Ltd (JSE4/2022). In this case, the Tribunal upheld two fines of
R7.5 million each, being the maximum per contravention on the basis of
deliberate, ongoing accounting fraud including fictitious transactions that falsely
inflated subsidiary income by about R376 million, false and misleading financial
statements, and conduct that caused shareholders to lose billions of rands and
precipitated the collapse of one of South Africa’s most prominent listed
companies.
35. As correctly conceded by Trustco in paragraph 51 of its written heads, mitigating
factors do not diminish the importance of compliance with the Listing
Requirements. This concession should be seen in the context of the test
applicable to the exercise of discretion and other factors. We are therefore unable
to find that a public censure and a R5 million administrative penalty are
disproportionate to the actual consequences of the breach.
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36. What Trustco refers to as ‘genuine attempts to comply’ cannot, in our view, justify
interference with an exercise of discretion by JSE in this case. The fact that
Trustco subsequently commissioned an independent comparison report which
concluded that the PEA demonstrated substantial alignment with the reporting
framework, does not sufficiently mitigate the serious nature of the non -
compliance to justify interference with JSE’s exercise of discretion.
37. The fact that Trustco is said to have demonstrated an attempt to find a workable
compliance solution and thereafter proceeded , in any event , to implement the
Transaction without compliance with paragraph 9.20(b) is, in our view,
aggravating rather than mitigating.
38. Cooperation with the regulatory process, followed by the decision to proceed with
implementation of the Transaction without shareholder approval and contrary to
paragraph 9.20(b) of the Listing Requirements, is concerning. At the same time,
it is speculative to suggest that such cooperation was not considered by the JSE
in the exercise of its discretionary powers when imposing the penalty . In any
event, the asserted cooperation occurred after implementation and after the non-
compliance had already taken place.
39. Trustco further, in its written heads , deals with what i t refers to as “ practical
commercial context ”. A statement is then made as follows: “The transaction
arose in circumstances where Meya required substantial capital to continue the
development of its mining operations. The commercial agency surrounding the
funding requirements formed an important part of the factual matrix against which
Trustco’s conduct must be assessed”.
40. The practical and commercial context cannot be used as a defence to the
contravention. Neither can it be used as a mitigating factor to find that the
discretion to impose the financial penalty was not exercised properly, especially
taking into account the circumstances that preceded the non-compliance and the
taking into account the circumstances that preceded the non-compliance and the
events thereafter to date.
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41. Dealing with the absence of dishonesty, fraud or market abuse, Trustco accepts
that the contravention was serious and that the Listing Requirements are
intended to ensure that shareholders are protected. Implementation of the
Transaction had the potential to create the impression that shareholders had
provided approval as envisaged in paragraph 9.20(b). It is not only the
shareholders who need to be protected. Investors or potential investors also
need to be protected, and the implementation of the Transaction inherently
suggested approval by the shareholders when this was not the case.
42. The imposition of the R5 million penalty is criticised as being disproportionate and
unsupported by a discernible methodology. It is not clear what methodology is
being referred to in this regard.
43. In paragraph 68 of its written heads, Trustco refers to various aggravating
considerations, including the materiality of the transaction, the duration of the
non-compliance, the need for deterrence and Trustco’s prior regulatory history as
the basis for the sanction imposed.
44. Trustco then proceeded to make the following submissions:
“However, they do not explain how those considerations resulted in a
penalty of R5 million. No benchmark is identified, no comparative
analysis is undertaken, and no reasons are provided as to why a lesser
sanction would have been insufficient to achieve the objectives of
deterrence and compliance”.
45. Trustco has accepted that the contravention is serious but proceeded in any
event to implement the Transaction without compliance with the imperative in
paragraph 9.20 (b) of the Listing Requirements. It would be a free-for-all if the
serious nature of the contravention were not reflected in the penalty imposed, as
the JSE did in this case.
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46. Benchmarking can never be a size-fits-all. The comparative analysis asserted by
Trustco should be considered in context. It should not substitute the decision-
maker’s discretionary powers with another view of what would constitute an
appropriate sanction . Otherwise, the established principles applicable to the
exercise of discretionary powers would be undermined. The objective of the
sanction is not only for deterrence . Other relevant considerations discussed in
the preceding paragraphs must also be taken into account.
47. Comparison of the R5 million penalty in the present case with the administrative
penalty of R161.6 million that was set aside by this Tribunal in Jooste v FSCA
(A64/2020) is simply too far removed to provide a meaning ful basis for
comparison. In the circumstances, it cannot be said that the imposition of the R5
million penalty is irrational.
48. Prior breaches contended by Trustco to be of no consequence to the penalty
imposed cannot be correct . The fact that the previous breaches arose in an
entirely different regulatory context cannot render them irrelevant for purposes of
considering an appropriate sanction for contravention of paragraph 9.20(b) of the
Listing Requirements. The fact that those breaches involved different provisions
of the Listing Requirements did not, in our view, render the current breach
irrelevant to the previous contraventions or breaches.
49. The suggestion that strict compliance with paragraph 9.20 (b) was impossible and
this was ignored by JSE, insofar as it is intended to be relied upon as a
misdirection, must be rejected. The contention by Trustco is that it was
impossible to obtain the Competent Person Report (CPR) required in terms of
paragraph 10.4 of the Listing Requirements referred to in paragraph 13 above,
has no basis.
50. Before making this contention, Trustco had already indicated to the JSE that it
did not comply with the CPR requirement because it considered such a
did not comply with the CPR requirement because it considered such a
requirement unnecessary. Trustco cannot have it both ways. As intimated by