Mantengu Mining and Liberty Coal Challenge JSE Over Alleged Market Manipulation

Mantengu

South Africa’s financial markets are facing a storm as Mantengu Mining and Liberty Coal openly challenge the Johannesburg Stock Exchange (JSE) over alleged manipulation of Mantengu’s share price. Mantengu insists that unlawful practices undermined its value and weakened its ability to pursue acquisitions, while the JSE and Liberty Coal strongly reject the claims, branding them false and defamatory.

This dispute has captured attention not only because of its high stakes but also because it raises fundamental questions about market integrity, investor trust, and the ability of smaller companies to stand up against powerful institutions.

Mantengu Mining: Company Profile

Mantengu Mining is a small-cap mining company listed on the JSE, primarily focused on chrome and related resources. Like many emerging miners, Mantengu’s growth depends on maintaining a stable and competitive share price to raise funds and negotiate acquisitions.

Any disruption in valuation can destabilize strategic plans. According to Mantengu, its share price did not decline due to normal market activity but because of deliberate manipulation designed to weaken the company’s position.

Liberty Coal’s Alleged Role

At the heart of the accusations lies Liberty Coal, a coal mining company with links to Mantengu’s past. Mantengu argues that Liberty Coal acted as a “front” in a wider effort to manipulate its share price.

The allegations are fueled by the fact that Liberty Coal’s CFO, Ulrich Bester, is a former financial director of Mantengu and remains a significant shareholder. Mantengu claims this overlap provided both the motive and the means for manipulation.

Mantengu’s Allegations

Mantengu has formally outlined its grievances, which include:

  1. Naked Short Selling – The company claims traders sold its stock without borrowing or owning it, an illegal practice that can drive prices down artificially.
  2. Use of Proxy Entities – Mantengu alleges Liberty Coal and other entities were used to mask the identities of those benefiting from these trades.
  3. JSE’s Role – Mantengu accuses the JSE of negligence or complicity, arguing that the exchange blocked its ability to release key announcements through the SENS platform.
  4. Disrupted Acquisitions – The alleged manipulation complicated critical deals, including the proposed acquisition of Blue Ridge Platinum.
  5. Escalation to Law Enforcement – Mantengu has filed criminal complaints, naming individuals linked to both Liberty Coal and the JSE.

JSE’s Response

The Johannesburg Stock Exchange has flatly denied the allegations. Its defense emphasizes that:

  • All operations comply with the Financial Markets Act.
  • Securities lending and borrowing are legitimate practices, not proof of misconduct.
  • Mantengu’s accusations show a misunderstanding of market mechanisms.
  • Claims of blocking company announcements are false.

The JSE has also issued a cease-and-desist letter, warning Mantengu against further defamatory remarks.

Liberty Coal’s Counterposition

Liberty Coal has mirrored the JSE’s stance, rejecting the allegations as baseless. The company insists it has no incentive to manipulate Mantengu’s shares and has warned it may pursue defamation claims for reputational harm.

For Liberty Coal, the case is about defending its name in the face of accusations it considers unfounded and damaging to its market credibility.

FSCA’s Investigation

The Financial Sector Conduct Authority (FSCA) reviewed the allegations, focusing on claims of naked short selling. After investigation, the FSCA concluded that there was no evidence of market abuse.

Mantengu disagreed with this finding, arguing that the FSCA’s review was too narrow in scope and failed to capture broader irregularities in trading patterns.

Broader Implications

The dispute has stirred larger debates about South Africa’s financial markets:

  1. Investor Confidence – Even without proof, allegations of manipulation can damage trust and deter investors from small-cap stocks.
  2. Regulatory Strength – The case questions whether regulators like the FSCA have sufficient power and independence to identify systemic abuse.
  3. Corporate Risks – By going public, Mantengu risks lawsuits and reputational harm, even if it believes its claims are justified.
  4. Power Dynamics – The case highlights the vulnerability of small firms when confronting exchanges and larger institutions.
  5. Future Reforms – Calls for stronger transparency, oversight, and reporting mechanisms are likely to intensify.

Frequently Asked Questions (FAQs)

What is naked short selling, and why is it central to this dispute?
It is the practice of selling shares without borrowing or owning them. It is illegal because it artificially inflates supply and can drive prices down. Mantengu alleges this was used against its shares.

What did the FSCA conclude about Mantengu’s complaints?
The FSCA stated it found no evidence of deliberate market manipulation. Mantengu, however, disputes this outcome, claiming the review ignored critical data.

What legal risks does Mantengu face?
If Mantengu cannot prove its claims, it risks lawsuits from both Liberty Coal and the JSE, which could involve financial damages and further reputational losses.

Why has the JSE been directly implicated?
Mantengu claims the JSE either turned a blind eye to manipulation or actively blocked shareholder announcements. The JSE denies this.

Could this dispute reshape financial regulations in South Africa?
Yes. Even if no wrongdoing is proven, the case may push regulators to tighten rules, increase transparency, and improve investor protections.

Conclusion

The battle between Mantengu Mining, Liberty Coal, and the Johannesburg Stock Exchange is one of South Africa’s most watched corporate disputes. Mantengu insists it was deliberately targeted, while the JSE and Liberty Coal categorically deny any wrongdoing.

Whether the case ends in court or through regulatory reform, it has already sparked vital discussions about investor confidence, regulatory oversight, and the challenges smaller firms face in navigating South Africa’s financial markets.

The outcome will not just affect the parties involved—it may influence how the country’s financial system ensures fairness, transparency, and accountability in years to come.

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