The executive has been charged with attempting to bribe a senior police official to win a contract.
Takalani Tshivhase on Thursday appeared in the Pretoria Specialised Commercial Crime Court on charges he offered a 5 million rand bribe to a lieutenant general in the South African Police Service to secure a multi-million contract for police equipment.
(WATCH VIDEO: Impact of bribery allegations on Pinnacle share price)
Tshivhase, who has denied the charges, was arrested by the police’s anti-corruption unit in March and released on bail the same day. The case had then been postponed to allow his defence time for further investigation.
Magistrate Nina Setshogoe on Thursday granted the defence’s request to extend the postponement until July 2 to allow Tshivhase’s lawyers more time to prepare, adding there would be no more extensions. Both Tshivhase and his lawyer, Michael North, declined to comment.
(READ MORE: Is Pinnacle’s reputation at stake?)
The Pinnacle case has highlighted concerns about the use of corrupt practices to win state contracts in South Africa, and raised questions about the company’s governance.
The charges against Tshivhase – together with filings that show [DATA PNC:Pinnacle Holdings Ltd.]’s CEO and executives sold stakes in the company before announcing the allegations – wiped out as much as 135 million US dollars of shareholder value.
(WATCH VIDEO: Pinnacle Director charged with corruption)
The Johannesburg Stock Exchange told Reuters last month it was investigating whether the hardware distributor violated rules on timely disclosure by waiting 20 days after Tshivhase’s arrest to make an announcement.
The JSE has declined to comment on whether it was investigating the timing of the share sales. Pinnacle has said that the executives had requested permission for their share sales before Tshivhase’s arrest.
Pinnacle CEO Arnold Fourie told Reuters last month the charges against Tshivhase were a “huge misunderstanding”.
Pinnacle has said it had no reason to doubt the veracity of Tshivhase’s denial.
Tshivhase has since been granted a leave of absence from Pinnacle and stepped down from the board of another company, [DATA DCT:Datacentrix Holdings Ltd.].
Pinnacle lost 43 per cent of its market value in the two days after the charges were announced but has since recouped some losses. Shares of the company were at 14.05 rand at 1017 GMT, down 30 percent from the closing price on the day before the allegations were announced.
Pinnacle is not the first company to come under scrutiny over awards of government contracts in South Africa.
US technology firm Net 1 UEPS Technologies has said it is being investigated by the US Department of Justice and the FBI over whether it made corrupt payments to South African government officials to win a contract with the national welfare agency.
(READ MORE: Net1 social grant tender to undergo new process)