The Securities Regulation Panel (SRP) of South Africa has confirmed that it is discussing allegations made by gaming group Tsogo Sun with Gold Reef Resorts. On Friday Gold Reef informed its shareholders that the discussions followed the publishing of press articles about Tsogo Sun’s alleged previous higher offer for Gold Reef shares. Ethos Private Equity has been approved by Gold Reef shareholders to buy the company in a deal worth R11.4 billion (US$1.6 billion).

The SRP has not said whether a full-scale investigation will be launched into Tsogo Sun’s allegations. The Gauteng Gambling Board, which must give regulatory approval of the Ethos offer, is presently conducting a hearing into the matter. Gold Reef maintains that the Tsogo Sun merger talks never reached board level and that the company could not give a commitment to sell some casinos if the merger was classed anticompetitive by the authorities.

Tsogo Sun further alleges that Maxim Krok, non-executive chairman of Gold Reef Resorts, received R12 million in compensation for approving the Ethos bid. On 11 January in a shareholder announcement Gold Reef stated categorically that a comprehensive formal process was conducted by the Board for the purpose of soliciting the highest offer for the company, and at no stage during the process did the Board receive either an offer of R34.50 or a firm intention to make an offer from Tsogo Sun. (E-01.15.08)

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