By South Africa’s financial regulator has fined and debarred three executives linked to Africa Bitcoin Corporation for 20 years over Altvest share price manipulation, imposing combined penalties of 10 million rand ($580,000) for trading conducted in 2022.
The Financial Sector Conduct Authority (FSCA) said Warren Wheatley, his wife Tatum Keshwar-Wheatley and Akshay Karan coordinated trades in Altvest shares between Sept. 5 and Sept. 8, 2022, when the company was listed on the Cape Town Stock Exchange.
The regulator found that the transactions created an artificially inflated share price and a false or deceptive appearance of demand, supply or trading activity in Altvest shares, according to the FSCA’s findings reported by the company and South African media.
The conduct contravened Section 80 of South Africa’s Financial Markets Act, which prohibits activities intended to create a misleading or deceptive impression about trading activity or the price of a listed security.
Wheatley, who was Altvest’s chief executive at the time, was fined 5 million rand jointly and severally with WGW Capital, which held a 34% stake in Altvest during the period under investigation.
Keshwar-Wheatley and Tatum Keshwar Investments were fined 3 million rand. Tatum Keshwar Investments held a 17% stake in Altvest at the time, according to the FSCA.
Karan, who was chief investment officer, was fined 2 million rand for his involvement in the transactions. All three individuals were also debarred from the financial services industry for 20 years.
The case centres on trading in Altvest shares before the company changed its name to Africa Bitcoin Corporation and shifted its strategic focus towards bitcoin.
Africa Bitcoin Corporation is now listed on the Johannesburg Stock Exchange’s Main Board under the ticker BAC. The JSE said in May that the company had migrated from the exchange’s AltX market to the Main Board as part of a broader market segmentation framework.
The company has said the regulatory action was directed at the three individuals and not at Africa Bitcoin Corporation or its subsidiaries.
In a statement released on Sept. 1, the company said its board had been informed on Aug. 30 of the FSCA decisions affecting Wheatley, Karan and Keshwar-Wheatley.
The board subsequently placed Wheatley and Karan on precautionary leave from their executive, management, advisory, operational and decision-making responsibilities. Keshwar-Wheatley’s consulting services were also suspended, subject to the terms of the relevant agreement.
The measures took effect on Aug. 31 for an initial one-month period and are subject to board review, the company said.
Stafford Masie, an executive director and director of bitcoin strategy, assumed the role of interim chief executive on Aug. 31. He will also oversee the group’s executive arrangements relating to Altvest Credit Opportunities Fund, a wholly owned subsidiary, although he will not serve as a director of that entity.
Wheatley also resigned as a director of Africa Bitcoin Corporation with effect from Aug. 31. Wheatley, Karan and Keshwar-Wheatley resigned as directors of Altvest Credit Opportunities Fund on the same date, according to the company’s disclosure.
Africa Bitcoin Corporation stressed that the measures were precautionary and non-disciplinary and did not represent a determination by its board on the merits of the FSCA’s findings.
The executives have disputed the regulator’s findings and intend to apply to the Financial Services Tribunal for reconsideration and suspension of the FSCA decisions, the company said.
As of the company’s Sept. 1 announcement, no order suspending the FSCA decisions had been granted, meaning the regulatory decisions remained effective.
The regulatory action has brought renewed attention to the Altvest share price manipulation case because the transactions occurred before the company became Africa Bitcoin Corporation and adopted its current bitcoin-focused strategy.
Altvest was originally established as a financial services business providing investment and financing opportunities. Its securities began trading on the Cape Town Stock Exchange in 2022, before the company later moved its primary listing to the JSE.
The company’s historical disclosures show that Wheatley was an executive director of Altvest and that WGW Capital was associated with his interests. A 2022 company disclosure recorded dealings in Altvest ordinary shares by WGW Capital, identifying Wheatley as the relevant director and the transactions as on-market purchases and sales.
Africa Bitcoin Corporation has since expanded its activities and adopted bitcoin as a strategic treasury asset while retaining a private-credit business focused on small and medium-sized enterprises.
The JSE said in May that Africa Bitcoin Corporation’s Main Board listing reflected its development and described the company as operating a bitcoin treasury strategy alongside a pan-African private-credit platform.
The FSCA action therefore concerns historical trading conduct involving the company’s predecessor, rather than a finding that Africa Bitcoin Corporation itself breached financial-market rules.
For investors, the immediate corporate impact is the change in senior leadership and the temporary removal of the three individuals from operational responsibilities while they pursue their challenge to the regulator’s decisions.
The Financial Services Tribunal process will determine whether the FSCA decisions are reconsidered or suspended. Until such an order is granted, the company’s disclosures indicate that the debarment decisions remain in force.
