FSCA: Confirms Insider Trading Investigation into Curro Shares

• The FSCA has confirmed an insider trading investigation into Curro Holdings shares following a R7.2 billion buyout offer by the Jannie Mouton Foundation.
• The buyout offer, announced on August 27, 2025, represented a 60% premium and caused Curro's share price to spike over 50%.
• Moneyweb identified three sets of unusually timed transactions preceding the announcement, including significant activity by Citiclient Nominees No. 8 and the Public Investment Corporation (PIC).
• Citiclient Nominees No. 8 acquired 8.8 million shares in the months before the announcement, then sold them for an estimated R31 million profit after the price surge.
• The FSCA's formal investigation grants it enhanced powers, such as compelling testimony and documents, to scrutinize potential breaches of market abuse provisions.

The FSCA's active pursuit of this market abuse probe underscores its commitment to maintaining the integrity and fairness of South Africa's financial markets.

The Financial Sector Conduct Authority (FSCA) has officially confirmed it is conducting an investigation into potential insider trading involving shares of Curro Holdings. This probe follows a significant R7.2 billion buyout offer made by the Jannie Mouton Foundation, which sought to acquire all outstanding shares it did not already possess. The foundation's proposal, announced on August 27, 2025, aimed to delist the education company and transform it into a public benefit organization, dedicating future profits to establishing new schools.

This substantial offer represented a 60% premium over Curro's share price prior to the announcement, leading to a sharp increase of over 50% in the share value immediately after the news broke. The FSCA's market abuse probe was initiated after a statutory body, such as the JSE or Strate, reported suspicious transactions to the regulator late last year. These transactions, which occurred ahead of the buyout announcement, had been under an initial assessment phase by the FSCA until recently.

A detailed analysis of Curro's shareholder registers by Moneyweb identified three distinct sets of transactions exhibiting unusual timing in the six months leading up to the foundation's buyout offer. While the FSCA has not publicly disclosed which specific transactions are currently under investigation, these identified trades provide insight into the activity preceding the significant share price movement.

One notable entity, Citiclient Nominees No. 8, a London-based nominee account associated with Citigroup, showed significant activity. After maintaining a stable holding of approximately 13 million Curro shares since at least July 2024, Citiclient began accumulating additional shares in early 2025, acquiring about 1.7 million in April. This accumulation accelerated in June and August, just weeks before the August 27 announcement, with an additional 7.1 million shares purchased. Following the share price spike, Citiclient then sold 8.7 million shares in early September, effectively returning to its pre-April holding and generating an estimated profit of R31 million. Citigroup, when questioned, stated its policy not to comment on such matters or disclose beneficial owners.

Another significant player, the Public Investment Corporation (PIC), a long-standing Curro shareholder, also engaged in notable transactions. The PIC sold 1.2 million shares in June 2025 but then repurchased 7.2 million shares in July, less than two months before the buyout announcement. This specific trade was valued at over R21 million on the day the offer was made public. The PIC subsequently denied any wrongdoing, attributing its share transactions to portfolio rebalancing exercises or the trading activities of its appointed active managers. Furthermore, several entities linked to the Jannie Mouton Familietrust were also observed trading Curro shares between April 10, 2025, and the date of the announcement, adding another layer to the FSCA Curro market abuse probe.

The Financial Sector Conduct Authority operates a structured process when addressing market abuse complaints, beginning with an assessment stage. During this initial phase, the FSCA will evaluate whether the available facts indicate a potential breach of market abuse provisions. If this threshold is met, the regulator then considers various factors to determine if a formal investigation represents the most effective regulatory tool.

Crucially, the FSCA's powers are limited during the preliminary assessment phase. However, once a formal investigation is launched, the authority appoints a dedicated investigator and gains significantly enhanced investigative capabilities. These include the power to compel verbal testimony from individuals and to demand the production of relevant documents, strengthening its ability to uncover potential breaches of South Africa insider trading law. Given the ongoing nature of the FSCA insider trading investigation into Curro shares, the regulator has refrained from commenting on any specific transactions or accounts, noting that the duration of such probes is highly case-dependent.

The FSCA's active pursuit of this market abuse probe underscores its commitment to maintaining the integrity and fairness of South Africa's financial markets. Investigations such as the Jannie Mouton Foundation Curro buyout investigation serve as a critical mechanism for ensuring that all participants operate on a level playing field, particularly around significant corporate events like mergers, acquisitions, or delistings. The focus on transactions like the Citiclient Nominees Curro trades and the PIC Curro share transactions FSCA highlights the regulator's vigilance over unusual trading patterns that precede major announcements.

This case sends a clear message to market participants, including those involved in M&A transactions or capital markets activities, and to compliance officers at financial institutions. It emphasizes the importance of robust internal controls and diligent oversight to prevent and detect potential insider trading. The FSCA's enhanced investigative powers during a formal probe mean that any alleged market abuse will be thoroughly scrutinized, reinforcing the need for strict adherence to South Africa insider trading law and ethical conduct across the financial sector.

Lawyers advising on M&A transactions or capital markets activities, and compliance officers at financial institutions, should note the FSCA's active pursuit of market abuse allegations, particularly around significant corporate events. This case highlights the regulator's enhanced investigative powers during a formal probe and underscores the importance of robust internal controls and due diligence to prevent and detect potential insider trading.

Source: Original reporting via Moneyweb