Market indifferent to Beijing-Tencent tie-up

There was a surprisingly muted response to news that Tencent was in discussion with the Chinese government about plans to link exit-entry permits for travelling between mainland China and Hong Kong and Macau to individuals’ WeChat accounts.

The Tencent share price ticked up but settled back to about HK$420 ($53.50), where it seems to have been stuck in recent months.

The discussions highlight the Chinese government’s commitment to driving technology into as many spheres of public life as possible. It also highlights the close relationship between the government and the country’s leading technology companies and none more so than Tencent. The group’s chairman, Ma Huateng, is a senior figure in the Chinese Communist Party.

The hope is that the WeChat app would make travel a little easier. Not everyone is delighted about the plan, particularly those in Hong Kong and Macau who take their legal separation from China very seriously.

WeChat is also working to develop a function similar to the Chinese resident identity cards, which are necessary for such things as checking into hotels and opening bank accounts. The WeChat electronic ID is already being tested in pilot programmes around the country.

Of course the much bigger picture is China’s social credit system, expected to be running by 2020. The system intends assigning a “social credit” rating to its 1.4-billion citizens and all businesses that operate in China based on social and economic data generated by the government and private sector big data companies such as Tencent and Alibaba. But as much as it stands to generate huge business opportunities for Tencent, involvement in the system could create some investor concerns. A ndrew Darfoor has ruffled feathers at Alexander Forbes, as any CEO who pulls rank and deals decisively with underperformance would be expected to.

The changes appear to have been so painful that some employees are willing the return of former CEO Ed Kieswetter.

Kieswetter left abruptly in February 2016, forcing Forbes to make then chairman Sello Moloko an executive chairman and appoint then chief financial officer Deon Viljoen as interim CEO. Evidently a lack of succession planning by the board meant no one was in the wings to take over from Kieswetter, a seasoned public servant.

Enter Darfoor, a Ghanaian who grew up in the UK and has lived all over the world, including in the US and France.

His decisive leadership style is probably just what Alexander Forbes needed. And he has wasted no time in making his mark on the organisation, placing several foreigners in charge of key portfolios, such as the group’s corporate and employee benefits unit.

Even the head of human resources is a non-South African appointment, which may seem counterintuitive.

But Darfoor — who says Alexander Forbes needs the expertise of these individuals — has clear plans to build a robust pipeline of black talent in the organisation. He is also undeterred by market noise about his leadership style, which is just as well, because he is only one year down in his four-year turnaround plan.