Caxton Issues Retraction After JSE Censure Over Mpact Dispute Statements

Caxton & CTP Publishers and Printers, often known simply as Caxton, faced the consequences of corporate power clashes yesterday, following a censure from the Johannesburg Stock Exchange (JSE). This development arose from the media giant’s approach to a contentious attempted acquisition of Mpact, where they are the largest shareholder. After the JSE found Caxton had breached its listings requirements due to certain controversial statements, the company issued an immediate and full retraction.

The dispute harks back to 2022, when Caxton sought to increase its stake and influence in Mpact, a leading company in paper, plastics packaging, and recycling, of which it owned just over one-third of the shares. The controversy centered around accusations from Caxton, which the JSE has since deemed to fall short of the required standards of care expected.

Specifically, Caxton had attacked the Mpact board, suggesting it failed to comply with fiduciary duties. This included a severe charge—poor disclosure of a 'long-standing cartel' involving Mpact and New Era, a subsidiary of Golden Era. Additionally, Caxton levied allegations regarding insufficient transparency over the material risks of a potential merger with it and questioned the independence of Mpact's board amid these merger talks.

Beyond the board’s alleged shortcomings, Caxton accused the Mpact directors of insider trading, propelling the dispute to significant intensities. Yet, when the accusations became public, Mpact defended its position, stating that upon discovering potential anti-competitive behavior with Golden Era, it acted quickly to engage with the Competition Commission, earning leniency due to its cooperation.

The JSE, acting as the market's custodian, found Caxton’s conduct lacking. By not observing "the highest standards of care," Caxton compromised investor confidence in corporate governance standards—an indispensable component of a sound financial ecosystem. This retraction underscores a robust regulatory framework guiding information dissemination upon which investor decisions hinge.

Caxton's subsequent retraction was clear and unambiguous, aligning with their legal requirements, yet the company offered no additional commentary on the matter or the JSE's findings. This silence from a corporation with Caxton's stature speaks volumes, emphasizing the gravity of the JSE censure and the importance of adherence to corporate disclosure standards.

This incident serves as a staunch reminder that corporate engagements, especially in acquisition scenarios, are closely monitored and must adhere to strict governance principles. For investors and the market at large, this accountability is crucial in upholding trust and integrity within South Africa's economic landscape. The episode also illuminates the regulatory bodies' readiness to enforce rules and ensure a transparent market that contributes to healthier corporate practices.

As the dust settles, the broader implications of Caxton's admission of fault may reverberate through corporate South Africa, highlighting the delicate balance between shareholder engagement, corporate governance, and the regulatory oversight that keeps the corporate world in check.