Mohale’s assertion on Investec off the mark

The stance of Business Leadership South Africa (BLSA) on the appointment of joint CEOs at Investec (one black, one white) is at once predictable and surprising — predictable that it has taken the two appointments as a case of white CEO nannying black CEO until he is ready.

While this may be understandable — given the case of Sim Tshabalala and Ben Kruger at Standard Bank, with Tshabalala eventually named group CEO in 2018 – it is probably misguided in Investec’s case.

Since it established a dual listing in 2002, Investec has had two centres of power: SA under CEO Stephen Koseff and London under MD Bernard Kantor.

This tradition, it seems, will continue under Hendrik du Toit, who will oversee Investec’s considerable international businesses, with a continued focus on asset management, while Fani Titi will hold the fort in SA and have oversight of the specialist banking operations, arguably the harder job.

The decision to make a nonexecutive a joint CEO surely shows considerable regard for Titi’s abilities. He will be held responsible for Investec’s main money-spinner too, as specialist banking in SA is still the biggest single contributor to earnings.

BLSA CEO Bonang Mohale’s assertion that Titi’s appointment perpetuates the narrative that black people “are in perpetual training without ever graduating” is, in this case, widely off the mark. His public disquiet with the black-white demographic of Investec’s new leadership is likely to make for interesting discussion at BLSA’s next meeting, given Koseff’s membership on its board.

It’s easy to forget that Naspers is the largest media group in the country. It’s not just that its media business is dwarfed by the Tencent giant and its MultiChoice operations, it’s that the group’s head office seems totally out of touch with its South African media roots. How else can you explain the bizarre decision to ask Investec to withdraw an analyst report it says has damaged Naspers and its shareholders?

Naspers hasn’t said the report shouldn’t be published. “All we’re asking is that they retract the current version with the inaccuracies so that people do not rely on it, and reissue it incorporating the correct facts and calculations,” the company told Bloomberg.

Within minutes of word getting out that Naspers was unhappy, it seemed that almost everyone in the market had managed to get sight of the offending report. In SA, a stamp of “disapproval” is almost guaranteed to ensure success.

The report was released on January 22 and in a few more weeks might have died a quiet death, known only to Naspers aficionados. But thanks to the target company, there’s now no chance of that happening. And rightly so. This is a great report and deserves to be widely read.

The authors have obviously spent a considerable amount of time researching this remarkably complex company. And, perhaps inevitably, there are areas of disagreement not just between the authors and Naspers but between the authors and other analysts. That’s how it works.

One important issue raised by Investec is that the liberal use of share-based awards has meant Naspers’s executives have benefited hugely – and inappropriately — from Tencent’s performance. This deserves all the attention Naspers has ensured it now gets.