GROUP FIVE’S

Black CEO faces un­cer­tain fu­ture

CityPress - - Business - GOD­FREY MUTIZWA busi­ness@city­press.co.za

Group Five’s new di­rec­tors voted in this week

Nom­i­nated by Al­lan Gray:

Rei­tumetse Hunt­ley

Chair­per­son of law firm Mkha­bela Hunt­ley Adek­eye. Nonex­ec­u­tive di­rec­tor of Capitec

Nyami Mandindi 98%

A pro­fes­sional quan­tity sur­veyor. Ex­ec­u­tive di­rec­tor of Kusile Africa and Petals Global. Nonex­ec­u­tive di­rec­tor of Hu­daco In­dus­tries, Hu­daco Trad­ing and Itisa. Chair­per­son of SVA Ar­chi­tects

John Job

Has PhD in chem­istry and was CEO of Sen­tra­chem from 1991 to 1998. Ex­ec­u­tive di­rec­tor of Sappi un­til 2005. Served on a num­ber of boards in­clud­ing Sappi, Telkom Arm­scor and Denel In­dus­tries, Hu­daco Trad­ing and Itisa. Chair­per­son of SVA Ar­chi­tects

Nazeem Martin

Founder of the Wallflower Group, which is a busi­ness started in Au­gust 2016 to build up in­ter­ests in the real estate, food/aqua­cul­ture, health­care and ed­u­ca­tion sec­tors

Michael Up­ton

For­mer Group Five CEO from 2007 to Novem­ber 2014

Nom­i­nated by PIC:

Thabo Kgogo

67% 61% 74%

Votes for

99%

65%

Fi­nan­cial and in­vest­ment back­ground in­clud­ing hold­ing var­i­ous top lead­er­ship roles at San­lam. Nonex­ec­u­tive di­rec­tor of Sphere Hold­ings

Nom­i­nated by Mazi Cap­i­tal:

Ed­ward Wil­liams

58%

Has a back­ground in engi­neer­ing and project man­age­ment. Ex­ec­u­tive chair­man of Phu­maf Con­sult­ing Engi­neers

Keneilwe Moloko stepped out of the run­ning for di­rec­tor­ship at the ex­tra­or­di­nary ge­neal meet­ing

Group Five nonex­ec­u­tive di­rec­tors that re­signed this week:

Vin­cent Rague As­set man­ager Al­lan Gray’s mass sweep-out of con­struc­tion com­pany Group Five’s black-dom­i­nated board at a ran­corous ex­tra­or­di­nary gen­eral meet­ing has left CEO Themba Mo­sai fac­ing an un­cer­tain fu­ture just two months af­ter tak­ing over.

Mo­sai, who was an­nounced as the in­terim group CEO in May af­ter for­mer CEO Eric Ve­mer re­signed in Fe­bru­ary, held noth­ing back when asked to give an up­date on the com­pany’s busi­ness fol­low­ing the pub­li­ca­tion of a trad­ing up­date this week.

The up­date showed that the com­pany would re­port a ma­jor loss in the year ended June, af­ter post­ing a profit in the pre­vi­ous year, be­cause of a de­te­ri­o­rat­ing en­vi­ron­ment and the pay­ment of a reg­u­la­tory fine for col­lu­sion.

“Any­one who op­poses trans­for­ma­tion in a coun­try where the ma­jor­ity of the pop­u­la­tion re­mains at the mar­gins of eco­nomic par­tic­i­pa­tion, does not un­der­stand the mar­ket,” he told the ex­tra­or­di­nary gen­eral meet­ing.

“It is a sick so­ci­ety where the ma­jor­ity has to create laws to pro­tect it­self against the mi­nor­ity. It is a sick so­ci­ety where per­cep­tions of com­pe­tence are ap­por­tioned on the ba­sis of pig­men­ta­tion.

“Judge us on our re­sults, our per­for­mance, and not the tone of our skin colour. Let me run my race, let me com­plete my marathon and then you can judge me – not be­fore, as this is called pre­judice.”

Pressed on whether Al­lan Gray would sup­port Mo­sai, given his crit­i­cal re­marks at the EGM and the strat­egy he had out­lined, Al­lan Gray port­fo­lio man­ager Leonard Kruger said: “It is too soon to say. He made a statement in sup­port of the out­go­ing board, which we dis­agreed with. But he has an ex­cel­lent op­por­tu­nity to re­build the team with the sup­port of the new board.

“We will give him the time and space he needs. It will be, to a large ex­tent, at the dis­cre­tion of the new board. We will take our guid­ance from them.”

Kruger de­nied the fund man­ager was anti-trans­for­ma­tion. He pointed out that three of the com­pany’s five nom­i­nees were black and in­sisted that all Al­lan Gray sought and would de­mand from the in­com­ing board was in­dus­try ex­pe­ri­ence and the abil­ity to de­liver value for all in­vestors.

“It is com­plete non­sense that we are anti-trans­for­ma­tion,” Kruger told City Press af­ter the EGM.

“We are not push­ing for un­bundling. We hope the new board will take ap­pro­pri­ate ac­tion to take the com­pany for­ward, which is in the in­ter­ests of all share­hold­ers.”

Be­fore this week’s his­toric vote Mo­sai, out­go­ing Group Five chair­per­son Philisiwe Mthethwa and independent di­rec­tors Justin Chinyanta and Kalaa Mpinga took turns to de­nounce the con­duct of Al­lan Gray and Coronation Fund Man­agers, ac­cus­ing the share­hold­ers of apartheid-era col­lu­sion that saw them kick out a black-dom­i­nated board to frus­trate trans­for­ma­tion.

Al­lan Gray, Group Five’s largest share­holder with 25%, and Coronation with about 14.49% own­er­ship, pro­posed that Group Five un­bun­dle the com­pany’s lu­cra­tive investments and con­ces­sions busi­ness in April, leav­ing the un­prof­itable engi­neer­ing and con­struc­tion busi­ness. It sug­gested the pro­ceeds should be dis­trib­uted to share­hold­ers.

City Press has seen a copy of the let­ter.

Any ma­jor un­bundling or sale of Group Five as­sets would re­quire the ap­proval of 75% of the com­pany’s share­hold­ers.

“Th­ese guys are ba­si­cally try­ing to take us back to the old South Africa – do­ing deals in pri­vate white clubs,” Chinyanta told City Press.

“If we had agreed to Al­lan Gray’s strat­egy, what would have been left is the engi­neer­ing and con­struc­tion busi­ness, which is a dog. That is what they wanted to give the blacks. It is not an equal play­ing field.”

Mthethwa was equally forth­right in her clos­ing re­marks af­ter the even­tual elec­tion of eight new nonex­ec­u­tive di­rec­tors – up from the five ini­tially pro­posed by Al­lan Gray.

“I hope that this has been a les­son for all share­hold­ers, large or small, that the in­ter­ests of a com­pany should be de­cided by all share­hold­ers and not only by those sig­nif­i­cant share­hold­ers with deep pock­ets,” she said.

“I believe this out­come – of a more di­verse group of nonex­ec­u­tive di­rec­tors than what was orig­i­nally mooted by Al­lan Gray – is a suc­cess for share­hold­ers.’’

All five of Al­lan Gray’s di­rec­tor nom­i­nees were elected at the EGM – with the Pub­lic In­vest­ment Corporation, which holds about 20% of shares, get­ting in two. Mazi Cap­i­tal got its lone nom­i­nee in. How­ever, an anal­y­sis of the vot­ing showed up di­vi­sions, with a num­ber of di­rec­tors re­ceiv­ing strong op­po­si­tion to their elec­tion.

Mazi Cap­i­tal’s Ed­ward Wil­liams bagged the low­est sup­port of all the di­rec­tors as 42.27% of share­hold­ers present voted against him. Mike Up­ton, the for­mer Group Five CEO who was nom­i­nated by Al­lan Gray and has been mooted as the next chair­per­son, got just 61.16% of vot­ing sup­port.

Kruger ad­mit­ted that Al­lan Gray had voted against some of the pro­posed di­rec­tors be­cause it felt a board with eight non-independent di­rec­tors was too big for a com­pany the size of Group Five.

CHANGE NEEDED

Cora Fer­nan­dez

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