Third Steinhoff hearing a worthwhile exercise
The planned hearing later in August into the circumstances surrounding the collapse of Steinhoff by no less than three portfolio committees will be the third in the series of parliamentary hearings into this corporate scandal.
The highlight of the event is likely to be the appearance of the group’s former chief financial officer, Ben le Grange, who has apparently indicated he will attend the hearing, having missed the first two.
If he changes his mind, and assuming former CEO Markus Jooste continues to turn down invitations to attend, the parliamentarians, journalists and members of the public will have to rely on the various regulatory bodies for entertainment.
Ensuring entities such as the Financial Sector Conduct Authority, Independent Regulatory Board for Auditors, the JSE, the Companies and Intellectual Property Commission and the Reserve Bank have to stand up and remind the public of exactly why they have not been able to make much, if any, progress makes it a useful exercise.
For one thing it ensures these entities know that the public will not easily overlook the fact they have a role to play in controlling companies. In addition, it will also remind everyone of how poorly resourced, or ineffectual, they are.
Perhaps it’s time for the MPs to extend their invitations to the banks and institutional shareholders, who provided much of the fuel for Steinhoff’s acquisition spree. The Public Investment Corporation has put in an appearance and added nothing to anyone’s understanding of the issues. But while Parliament is paying some attention, there is hope someone will be held accountable for the loss of hundreds of billions of rand.
Montauk Energy is an odd feature of the JSE. Never mind that the company is based in Philadelphia, more than 300km from the village of Montauk. It is also listed exclusively in SA even though it has always only operated in the US where it extracts natural gas from landfills.
In Johannesburg, Montauk has been listed since 2014 and has a not insignificant market valuation of R13.5bn. A decent amount of its shares trade each day. The company was acquired by default by Hosken Consolidated Investments when it bought up Johnnic to gain a sizeable stake in Tsogo Sun.
The market had never attributed much value to Montauk, which caused losses for Johnnic. But an unbundling of the firm to list on the JSE has unlocked significant value for shareholders. Over the past four years the share price has shot up 95% from R5 to R96 this week.
Montauk offers a way to invest in a remarkable renewable energy story in the US. Under the Renewable Fuel Standard, refiners and importers of fuel used in transportation must, by law, have certain volumes of renewables mixed in. And it’s precisely there where Montauk’s natural gas is destined.
It is unlikely US President Donald Trump will mess with the arrangement because maize farmers are making fat profits from selling crops for ethanol.
The price-to-earnings ratio for Montauk is above 43, even though the dividends to shareholders are nothing spectacular. It’s expensive, but it looks like shareholders think Montauk is a sure thing.