JSE-listed Royal Bafokeng Platinum (RBPlat) has advised of an investigation that is under way to determine whether RBPlat issuing shares to its CEO and COO earlier this year was unlawful.

This comes amid a battle between fellow-listed miners Northam Platinum and Impala Platinum (Implats), with each wanting to acquire all the shares it does not already own in RBPlat.

Northam made the most recent all-share offer of R172 apiece, compared with Implats’ takeover offer of R150 apiece.

Implats’ current stake in RBPlat is 40.66%, while Northam Platinum holds a 35% stake.

RBPlat on April 26 announced the retirement of its CEO and COO, as well as the conclusion of new fixed-term contracts with the two executives. RBPlat wanted to retain Steve Phiri’s services as CEO and an executive director for 12 more months or until certainty was attained regarding the proposed buyouts by Implats and Northam.

RBPlat entered into a similar contract with COO Neil Carr, who was also set to retire in April.

The agreements resulted in a pro-rated accelerated vesting of 560 176 RBPlat shares being awarded to the executives, in terms of the RBPlat share incentive scheme.

The share issuance was approved by the Takeover Regulation Panel (TRP) prior to being implemented. Subsequently, Northam lodged a complaint with the TRP, alleging that the share issuance and the contractual agreements entered into with the executives contravened Section 126 of the Companies Act.

In turn, RBPlat disputed this and the complaint was dismissed by the TRP.

Northam then appealed the TRP’s decision to the Takeover Special Committee (TSC), which found that the share issuance did indeed contravene the Companies Act. The TSC ordered that RBPlat correct the contravention in a manner provided for in the Companies Act and regulations.

The TSC also ordered the TRP or an investigator appointed by the TRP to investigate Northam’s complaint in its entirety under Section 169 of the Companies Act as expeditiously as possible.

RBPlat believes the ruling given by the TSC is legally and factually flawed, and is engaging with its advisers and the regulators as to the appropriate next steps.