Disgruntled investors jack up Safari’s board
Bad corporate governance is finally catching up with rural and peri-urban retail centre owner Safari Investments. Safari, which was incorporated in 2000, listed on the JSE in 2014 as a real estate investment trust (Reit) when Reits were new in SA.
Safari ’ s directors and management thought then that in becoming a Reit it would access lots of cash for developments. There was a Reit listings boom, with investors throwing hundreds of millions around.
Safari directors were soon doing related-party deals with development, marketing and financial companies, which they have largely halted after criticism. Then in early 2019, suitors arrived at Safari’s door. A merger offer from Fairvest and bids from Community Property Fund and Heriot were turned down. Since then, co-founder Francois Marais left the company, frustrated by directors who wouldn’t support Heriot’s takeover offer.
The bids valued Safari at a premium of 74%-91%.
In the past 13 months, minority shareholders Chris Logan and Albie Cilliers criticised the board on issues such as its handling of the takeover bids and eroding investors’ value.
Safari ’ s share price fell about 52% in three years.
At Monday’s annual general meeting, Logan and Cilliers claimed a victory: Kiki Pashiou, a Safari co-founder, lost his nonexecutive board seat. Logan said Pashiou had been a “key player in the extensive related-party transactions ” who had wanted to thwart takeovers.
New directors were also voted on to Safari’s board, and will hopefully make better decisions for shareholders.
RIO TINTO
The Australian Dream chronicles the struggles of indigenous footballer Adam Goodes against postcolonial discrimination. Rio Tinto’s CEO Jean-Sébastien Jacques may have missed the release of the movie in 2019. His resignation gives him a chance to catch up with a cause re-energised in Australia by the worldwide Black Lives Matter campaign.
Jacques is leaving Rio after the destruction of two 46,000year-old indigenous rock shelters in Western Australia. Though he takes the blame, a vacillating response by the Anglo-Australian miner’s chair put the company to shame.
A board-led investigation of the destruction of the sacred site in May effectively exonerated everyone except Rio itself. Reports on the significance of Juukan Gorge were ignored or missed by senior management.
The company previously negotiated native title agreements with the Puutu Kunti Kurrama and Pinikura people, giving it rights to mine the area. That was before archaeologists found important artefacts. Rio failed to abandon development.
The group’s attempts to atone were misguided and late. Bonuses of senior figures including Jacques were slashed by £4m in August. But putting a monetary value on irreplaceable indigenous heritage made matters worse. Chair Simon Thompson then threw his board a hospital pass two weeks ago, insisting Rio did not intend to remove Jacques.
Jacques ’ s legacy blew up with Juukan Gorge’s rock shelters. Rules to protect remaining sites will tighten. Mining bosses will tread more warily. Mine development will be slower. But in the greater scheme of things, 46,000 years and counting, that makes little difference.