PIC voted for director’s removal
• MPs told Daun’s reappointment to Steinhoff board was also opposed and his independence questioned
Shareholder concern about Len Konar’s long tenure on the Steinhoff board existed as far back as 2016, it has emerged. During the parliamentary review on Wednesday, the Public Investment Corporation confirmed that it had voted against the reappointment of Konar, a nonexecutive director, at the group’s extraordinary general meeting in May 2016. The PIC accounted for about half of the 22% of shareholders at the extraordinary general meeting who opposed Konar’s reappointment to the board.
Shareholder concern about Len Konar’s long tenure on the Steinhoff board existed as far back as 2016, it has emerged.
During the parliamentary review on Wednesday, the Public Investment Corporation (PIC) confirmed that it had voted against the reappointment of Konar, a nonexecutive director, at the group’s extraordinary general meeting in May 2016. The PIC accounted for about half of the 22% of shareholders at the extraordinary general meeting who opposed Konar’s reappointment to the board.
Despite the opposition, not only was Konar reappointed but he was appointed deputy chairman of the supervisory board and secured his place on three board committees: governance and nomination, audit and risk, and human resources and remuneration. The PIC told MPs its concerns related to the fact Konar had been on the Steinhoff board since 1998.
At the annual general meeting in March 2017 shareholders voted overwhelmingly in support of the group’s remuneration policy, which will give Konar fees of R4m for financial 2017.
Konar said last week that since October the nonexecutive directors had been working on Steinhoff matters without fees. Fees for the additional work, which is understood to be considerable, have not yet been approved at an annual general meeting.
The PIC also voted against the reappointment of long-serving Claus Daun, again questioning his independence.
PIC chief Dan Matjila said tenure affected the nature of the relationship between the nonexecutive directors and the CEO and was a particularly important issue when the CEO and chairman have dominant personalities. The Steinhoff situation had been aggravated by the Wiese family’s material shareholding, which the PIC believed enabled it to act in concert at the expense of minority shareholders.
Matjila contends Steinhoff is not worth zero and identified €10bn in noncore assets that could be sold off to improve the group’s balance sheet. These included properties of €3.8bn, investments and loans of €1.5bn, its €3.8bn investment in Steinhoff Retail Africa and its KAP shares worth €537m.
He acknowledged that a final figure for the value would only be known after PwC had completed its investigation.
Matjila said that the Steinhoff board was now under pressure to demonstrate its ability and willingness to unlock value.
During his unprepared presentation to the MPs, former Steinhoff chairman Christo Wiese said he was restrained from commenting on any inherent value in the company until the PwC investigation had been completed. However, he said he could refer to several reports by analysts pointing out just how much value there is in the group. “I happen to know the bulk of the businesses in the group, in terms of profitability are Pepkor operations, they are good businesses,” Wiese said.
On Thursday the JSE notified Steinhoff shareholders that as the company’s variable-rate, cumulative, nonredeemable, nonparticipating preference shares had a primary listing on the local bourse they would be suspended if the company failed to submit its annual report by February 28.
Similarly holders of bonds issued by Steinhoff Services, which have a primary listing on the JSE, were advised the bonds would be suspended if the annual report is not submitted by February 28.
However because Steinhoff’s primary listing is on the Frankfurt Stock Exchange (FSE) the JSE is not considering its suspension. Nicky Newton-King, CEO of the JSE, said the bourse could not suspend the share unless or until the FSE did as it would merely prejudice South African-based shareholders.