S.Africa watchdog to probe Gold Fields bid report

JOHANNESBURG (Reuters) - South Africa's financial sector watchdog will launch an investigation after shares of Gold Fields (GFIJ.J) surged on a report that a U.S. financier could bid for the firm, an official said on Thursday.

"We will investigate for a possible contravention of section 76 of the Securities Services Act that prohibits false and misleading information being published," Gerhard van Deventer, of the Financial Services Board, told Reuters.

An initial probe would be a preliminary one about whether the FSB -- which oversees the non-banking financial services industry -- had jurisdiction in the case, said Van Deventer, executive director of the FSB's market abuse department.

Gold Fields' shares soared by as much as 11 percent on Wednesday after a report by Bloomberg News that Edward Pastorini, identified as a U.S. financier, may lead a bid for Gold Fields, the world's fourth-largest gold producer.

The shares gave up most of their gains by the end of trading on Wednesday and were down 1.4 percent to 140 rand by 1430 GMT on Thursday. The company also trades on the New York Stock Exchange (GFI.N).

Bloomberg later said the details of the report and the identity of Pastorini could not be verified. The phone number provided by the man was used in 2003 by a Florida partnership that made phoney takeover bids for companies, it added.

Bloomberg said the documents about the bid were sent to it by a Gold Fields executive. Neither Bloomberg nor Gold Fields was immediately available to comment on Thursday.

JOINT INVESTIGATION

The probe into the original source of the information to Bloomberg will be conducted together with the bourse, JSE Ltd (JSEJ.J), which has jurisdiction over its member companies.

"I've just had a phone call from the stock exchange and we are meeting with them on Tuesday to discuss this matter among other things," Van Deventer said.

A key issue to be investigated would be whether those behind the release of information also profited by trading in Gold Fields shares, he said.

"If they were trading on the South African market before this announcement or after this announcement ... if you can link it together, we will certainly investigate this, there's no doubt, and this would give us jurisdiction," he said.

Fund manager Nick van Rensburg at Peregrine Capital in Johannesburg said it was important for regulators to probe the issue and to follow up if they found any wrongdoing.

"They're probably quite arrogant about how they won't get caught out by the authorities in these third-world countries. Which is why it is quite important that the FSB investigate this thing and hopefully they'll find something and take some action."