Adapt IT shares plunge on damaging claims against CEO

Shares in Adapt IT plunged more than 10% on Monday after claims were published at the weekend that CEO Sbu Shabalala hired armed thugs to beat up the partner of his estranged wife, Neo.

The share price fell as much as 11.3% to R6.28 soon after markets opened in Johannesburg. At the time of writing, they were off 9.8% at R6.39 apiece, 11c below the all-cash offer to buy the company from Canada’s Volaris Group.

For weeks, the counter has been trading above the Volaris offer price as investors bet that either Volaris or Adapt IT’s other suitor, Huge Group, which is pursuing an all-share deal, will offer more.

It’s not clear at this stage what impact the allegations made by Neo against Shabalala will have on a potential transaction, if any.

Neo has accused her estranged husband of hiring armed thugs to beat up her partner, suspended eThekwini city manager Sipho Nzuza. The Sunday Times reported that Nzuza was allegedly attacked at the upmarket Zimbali residential estate near Ballito last Saturday and had to undergo emergency surgery.

New deadline

The attack was reportedly so serious that Nzuza had to have his spleen and part of a kidney removed; he remains in intensive care in a Durban hospital, according to the report.

Shabalala has declined to comment. His spokesman told TechCentral on Sunday: “Given the divorce court proceedings and the inherently private nature of the matter, Mr Shabalala has been advised by his legal representatives to decline to make any statements at this stage.”

Meanwhile, Adapt IT and Volaris have again extended by a week the deadline for the fulfilment of the scheme of arrangement for the Canadian investment firm to buy the JSE-listed software services group. The fulfilment date is now 14 May. Adapt IT gave no reasons for the delay.  — (c) 2021 NewsCentral Media

Now read: Adapt IT CEO stands accused over violent attack in Durban home