Trustco : URGENT APPLICATION – TRUSTCO HEADS OF ARGUMENT

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

	Case No: 11121/2022
In the matter between:
TRUSTCO GROUP HOLDINGS LIMITED	Applicant
and
JSE LIMITED	First Respondent
THE FINANCIAL SERVICES TRIBUNAL	Second Respondent

APPLICANT'S HEADS OF ARGUMENT

INTRODUCTION

1. Trustco approaches this court for urgent interim relief to prevent the JSE from enforcing a decision to suspend its listing thereby in effect suspending, not only
   Trustco's right to trade its shares on the JSE, but also the right of the public at large to buy and sell their shares.
2. This decision was taken by Mr AG Visser ("Visser") within the JSE's rank who had no authority to take such a decision. The enforcement of such an illegal decision will, no doubt, cause irreparable harm to Trustco.
3. Despite having no answer to the illegality of Visser's actions, the JSE forged ahead and relies on the decision made by the Financial Services Tribunal ("the

Tribunal") in support of its persistence to implement the illegal decision. But, it is that very decision of the Tribunal, which forms the subject matter of a pending review before this court ("the Review Application"). And, as we make plain below, the Tribunal 's decision is marred with illegality and vitiating irregularity as well - it is bound to be set aside on clear an indisputable grounds being:

1. Visser's lack of authority to have made the JSE's decision;
2. the JSE's lack of power to order a restatement of the Financials;
3. the Tribunal itself was improperly constituted, and lacked desperately needed expertise. As a natural consequence of lacking expertise, the Tribunal, perhaps understandably yet not permissibly, could not consider the wide appeal which served before it. It was simply unable to deal with the intricate financial and accounting issues at hand; and
4. due to the lack of expertise the Tribunal overlooked pertinent considerations and took into account irrelevant factors including reaching for the "due deference principle" that is applicable in review proceedings, but has no role to play in the appeal proceedings which served before the Tribunal.

4. Accordingly, this is an application to interdict the JSE from suspending Trustco's listing on the Johannesburg Stock Exchange.1 The interdict is not sought indefinitely, but only until a Review Application is finally determined.2 The papers

1. NoM p 001-1 and FA p 001-9, par 8
2. FA p 001-9, par 9

and the parties heads of argument in the Review Application have been filed3 and the matter is now ripe for hearing.4

5. The circumstances that necessitate this application are as follows:

1. Trustco issued its unqualified audited financial statements for the 2018 and 2019 financial years ("the Financials"). The Financials accord with the specialist advice of a plethora of IFRS and IAS experts - each of whom are accredited and approved by the JSE;
2. the Financials were approved by Trustco's shareholders;
3. at the end of 2019, the JSE informed Trustco that it had been selected for review and that the Financials had been referred to the FRIP. The
   FRIP investigation was in respect of three transactions ("the Transactions");5
4. the FRIP disagreed with Trustco's accounting treatment of the
   Transactions;6
5. in October 2020, more than two years after the first of the Financials had been issued, the JSE informed Trustco that the Financials did not comply with IFRS and must be restated;7
6. Trustco objected to the JSE's finding and the JSE issued an amended decision in November 2020 which, for all intents and purposes, is the

1. Review Application p 008-1
2. SFA p 010-3, par 11

Although not on the papers, the JSE's heads of argument in the review were duly filed on 18 July 2022

1. Review Application FA p 008-28, par 60
2. Review Application FA p 008-29, par 62
3. ibid

same as the initial decision. In sum, the JSE ordered Trustco to restate the Financials ("the JSE Decision");8

1. the decision of the FRIP was appealed to the Tribunal (the second respondent) during 2021;
2. on 21 November 2021, the Tribunal dismissed Trustco's appeal and upheld the FRIP's decision ("the Tribunal Decision");9
3. during January 2022, Trustco launched an application to review and set aside the JSE Decision and the Tribunal Decision. That application is pending before the Pretoria High Court under case number: 5640/2022
   ("the Review Application");10
4. on 14 February 2022, the JSE informed Trustco that it intended to suspend Trustco's listing unless some action was taken on or before 11
   March 2022;11
5. on 18 February 2022, Trustco applied to the Chairperson of the Tribunal for a suspension and reconsideration of the JSE's decision to suspend Trustco's listing in terms of section 230 and 231 of the Financial Sector Regulation Act 9 of 2017 ("the FSR Act");12

1. Review Application FA p 008-30, par 63
2. FA p 001-11, par 18 and Annexure FA1 p 001-21
3. Review p 008-1
4. FA p 001-9, par 10
5. FA p 001-9, par 11

1. given the possibility that the Tribunal would not have made a decision before the 11 March 2022 deadline, Trustco also launched this application on an urgent basis on 23 February 2022;13
2. the JSE then agreed not to suspend Trustco's listing until a week after the Chair of the Tribunal had made a ruling of Trustco's application;14
3. as the JSE's undertaking had negated any immediate urgency, the matter was removed from the urgent court roll in the week of 9 March 2022;15
4. on 13 July 2022, the Chairperson of the Tribunal made a ruling refusing
   Trustco's application;16
5. the JSE then informed Trustco that it would suspend Trustco's listing on
   29 July 2022.17 This extended period was agreed between the parties in order to permit the filing of heads of argument.18

6. Having outlined the history of the matter, we now turn to consider:

1. the preliminary issues of urgency and lis pendens raised by the JSE;
2. Trustco's Review Application and the basis on which the Tribunal Decision is sought to be set aside;

1. FA p 001-9, par 12 read with SFA p 010-1, par 3
2. SFA p 010-2, par 4 and 7 read with Annexure RB1 p 010-6
3. SFA p 010-3, par 9
4. SFA p 010-2, par 5 and p 010-3, par 12 read with Annexure RB2 p 010-10
5. SFA p 010-2, par 6
6. SFA p 010-4, par 13 and 14 read with Annexure RB3 p 010-14