This comes after the Prudential Authority lodged an application to the High Court to place CICL into liquidation, with the court date set down for either September 6 or 13, 2022, depending on whether or not the application is opposed.
Conduit Capital is currently reviewing the application, before considering any legal response.
Last month Constantia Insurance Company was placed into provisional curatorship after it failed to find an investor to inject it with capital of at least R450 million.
The group also was temporarily barred from taking on new customers.
Yesterday, Conduit Capital said the move to not acquire new customers had a negative impact on its financial position.
“Given that the prohibition on the writing of new business and the suspension of CICL’s insurance license which accompanied the provisional curatorship and the adverse publicity associated therewith has resulted in an irreversible diversion by brokers and underwriting managers of a significant portion of CICL’s insurance portfolios to alternative insurers, which in turn has had, and will continue to have, a material adverse impact on the financial position of CICL and the going concern status of the business,” it said.
The group said while several inaccuracies were contained in the Prudential Authority and Curator’s founding affidavits, given that there were no legal grounds on which to oppose the application, the board has elected not to deal with these as part of the potential winding-up process and instead to take these up directly with the Prudential Authority and the Curator.
“Given that CICL is Conduit Capital’s main subsidiary, representing approximately 94.4 percent of the revenue of the consolidated group for the six months ended December 31, 2021, and the uncertainty of the impact that the liquidation of CICL, if granted, would have on Conduit Capital, shareholders are advised to continue to exercise caution when dealing in Conduit Capital securities until a further announcement is made,” it said.
Conduit Capital shares dropped by a massive 50 percent on the JSE. At the close they were 33.33 percent lower at 4 cents. Year to date, they decreased by almost 92 percent.
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