Introduction
In mid-2025, a fierce public dispute erupted when Mantengu Mining Limited, a small-cap mining company listed on the JSE, accused Liberty Coal and the JSE of orchestrating a scheme to depress Mantengu’s share price through alleged manipulative trading practices. The accusations include claims of naked short selling, conspiratorial collusion, institutional negligence, and defamation. The JSE and Liberty Coal have strongly denied the claims, and a regulatory investigation by the Financial Sector Conduct Authority (FSCA) has since cleared many of the core allegations. The conflict raises key issues of market integrity, regulatory oversight, and reputational risk in South Africa’s capital markets.
This article unpacks the timeline of events, the nature of the accusations, the responses from the parties, the regulatory findings, and the broader implications for corporate governance and investor confidence.
Background: Mantengu Mining & Liberty Coal
Mantengu Mining
- Mantengu Mining (ticker MTU) is a small-cap chrome miner listed on the JSE. Over recent years, its share price and market capitalization have experienced wide fluctuations, prompting its management to suggest external forces were acting to suppress the share price. BusinessLIVE+3writersroom.co.za+3IOL+3
- The company has also pursued acquisitions (e.g. in the Blue Ridge project) and has emphasized scaling operations as part of its strategy. IOL+2insightafricareports.com+2
- Mantengu’s management claims to have conducted internal investigations over approximately 18 months before going public with the allegations. IOL+2liberty-coal.com+2
Liberty Coal
- Liberty Coal is the owner/operator of the Optimum Colliery in Mpumalanga, and is not a chrome miner. liberty-coal.com+1
- Liberty Coal and its principal, Daniel McGowan, were named in Mantengu’s complaints as alleged participants in the conspiracy to manipulate Mantengu’s share price. liberty-coal.com+3liberty-coal.com+3IOL+3
- Liberty Coal strongly disputes any link to Mantengu and has threatened defamation and injunctive proceedings against Mantengu and its CEO, Michael Miller. liberty-coal.com+2liberty-coal.com+2
Timeline & Key Allegations
Mantengu’s Public Accusations
- On 8 May 2025, Mantengu made public a “summary of criminal complaint” alleging that key JSE executives, Liberty Coal, and certain individuals had colluded to manipulate Mantengu’s share price via illicit trading strategies. insightafricareports.com+3liberty-coal.com+3IOL+3
- The company claimed that trades were being made that could only be explained by naked short selling (i.e. selling shares without having borrowed them) and that the JSE itself had assisted in masking or covering up such trades. insightafricareports.com+3IOL+3liberty-coal.com+3
- Mantengu further alleged that when they raised concerns with the JSE, they were denied the ability to issue a SENS (Stock Exchange News Service) announcement to warn shareholders. IOL+2insightafricareports.com+2
JSE’s Reaction & Cease-and-Desist
- In response, the JSE issued a cease and desist demand to Mantengu over the public allegations, calling them vexatious and without merit. Moneyweb+1
- The JSE publicly denied involvement in any share manipulation, asserting that it had acted lawfully and in accordance with its regulatory duties, and that it did not have an obligation to alert Mantengu or any issuer of suspicious trading under the terms of the Financial Markets Act. IOL+2BusinessLIVE+2
- The JSE also said it had cooperated fully with the FSCA in their investigation. IOL+2IOL+2
Liberty Coal’s Counterclaim
- Liberty Coal responded sharply, characterizing Mantengu’s accusations as baseless and defamatory, even referring to Mantengu’s CEO as a “delusional fantasist” in one press release. liberty-coal.com+1
- Liberty Coal denies any interest in Mantengu or its share price, saying it does not trade in chrome, was not aware of Mantengu’s existence until the allegations, and has no connection to its shares or business. liberty-coal.com+1
- It demanded a public retraction of the claims by a deadline and threatened legal action for damages, interdicts, and crimen injuria (a South African delict related to dignity infringement). liberty-coal.com
Regulatory Investigation & FSCA Findings
- The Financial Sector Conduct Authority (FSCA) conducted an investigation into the alleged trading irregularities in Mantengu’s shares. IOL+2IOL+2
- In a statement, the FSCA said it found no evidence to support Mantengu’s claims of share price manipulation or naked short selling. The transactions and orders identified by Mantengu were deemed lawful in the ordinary course of business. IOL+2Moneyweb+2
- The FSCA also clarified that earlier press reports suggesting it had found a “prima facie” case were incorrect. IOL
- Moreover, the FSCA found no basis to suspect wrongdoing by the JSE or its officials with respect to the particular trades under scrutiny. IOL+1
Thus, in effect, the regulatory authority declined to pursue enforcement action on the basis of the allegations made by Mantengu.
Critical Assessment & Open Questions
1. Burden of Proof & Evidence
One of the central issues is that Mantengu’s accusations are serious but appear to rest on inference and selective trading patterns rather than direct proof (e.g. showing that someone sold shares without borrowing them). The FSCA’s evaluation, finding no evidence of improper conduct, suggests that the data did not support Mantengu’s assertions. IOL+2Moneyweb+2
In markets, naked shorting is a serious allegation but one difficult to prove absent very granular data on borrow/loan positions. The JSE has also defended that it is bound by confidentiality laws and cannot share every detail with issuers. IOL+1
2. Governance, Reputation & Defamation Risk
Mantengu’s public accusations placed significant reputational pressure on Liberty Coal and the JSE. These institutions, in turn, threatened legal recourse, arguing defamation and reputational harm. Liberty Coal’s categorical denials and counterattacks suggest that these claims were seen as a serious legal and strategic risk. liberty-coal.com+2liberty-coal.com+2
From a governance perspective, the episode underscores how accusations of market manipulation—even if later disproven—can inflict asymmetric damage on reputation and investor confidence.
3. Regulatory Authority & Market Surveillance
This controversy spotlights the delicate role of stock exchanges and regulators. The JSE asserts that it surveils trading activity and refers suspicious trades to the FSCA. Yet, Mantengu contends that the JSE failed to adequately monitor or act when notified of anomalous trades. IOL+2writersroom.co.za+2
The JSE’s claim that it is legally barred from disclosing certain information to issuers because of confidentiality demands (under the Financial Markets Act) introduces tension: issuers may feel hamstrung in responding to perceived manipulation. IOL+1
4. Investor Confidence & Small Cap Risk
Small-cap firms like Mantengu are particularly vulnerable to speculative trading, volatility, and perceived or real manipulation. In such environments, a loss of confidence—or the suggestion of market skullduggery—can exacerbate share price declines, funding challenges, and liquidity risk.
Even though the FSCA cleared the accused manipulations, lingering doubts or reputational effects may persist among investors, especially given the earlier sensational claims and media coverage. insightafricareports.com+2IOL+2
Implications & What to Watch
- Legal proceedings: Liberty Coal has already threatened defamation and injunctive action. Whether Mantengu and its CEO will have to pay damages or issue a retraction could be decided in court. liberty-coal.com+2liberty-coal.com+2
- Further regulatory review: Although the FSCA found no actionable misconduct, there could be further appeals or requests for deeper forensic examinations if new evidence emerges.
- Market reforms & disclosure: The saga may lead to calls for more transparency in securities lending, borrow/loan position disclosures, and issuer access to surveillance data.
- Precaution for small-cap issuers: Others in Mantengu’s industry or market segment may become more cautious in how they publicly address suspected manipulation, given the legal and reputational perils.
Conclusion
The conflict between Mantengu Mining, Liberty Coal, and the JSE over alleged share manipulation is a high-stakes drama that touches on critical issues of market integrity, regulatory oversight, and corporate accountability. While Mantengu’s accusations were bold and dramatic, the FSCA’s investigation did not substantiate the claims, and both Liberty Coal and the JSE have consistently rejected any complicity.
