Good job on exposing ELB shenanigans

Bravo to veteran journalist Marc Hasenfuss for highlighting the machinations at ELB Group in “It’s Getting Weird in Here” ( Market Watch, August 20-26), where he describes developments as “surreal at a corporate level”.

FM sister publication Business Day reported on the run in ELB shares when Apex Partners acquired 19.6% at about 850c a share in late 2019. Since then, matters have become more intriguing.

At a general meeting on May 25, the new chair, Apex’s prime mover Charles Pettit, told shareholders that the previous management was responsible for ELB’S underperformance. Nonetheless, ELB bought back R58m of shares from these underperformers (the senior members were no longer with ELB) at R19 a share.

Any hope that long-suffering shareholders had — based on Apex’s hefty purchases at 850c and the substantial purchases from the previous underperforming management at R19 — were shattered by the recently announced scheme to buy out ELB shareholders other than Apex at 200c a share.

Pivotal to this 200c buyout is the independent expert report by advisory firm Moore, which determined a negative value of -570c to -480c per ELB share, which sharply contradicts Moore’s own 470c valuation and the last stated NAV of R14 a share, both presented in April 2020, as well as Apex’s substantial purchases at 850c and the notorious buyback from the previous management at R19.

ELB has even evaded presenting audited accounts for the year ended June 30 2020, with only reviewed accounts being promised to shell-shocked shareholders.

Whether last week’s unexpected postponement of the general meeting to approve the 200c buyout offers hope of some transparency, only time will tell.

But either way, shareholders can thank Hasenfuss for bringing some exposure to these weird and surreal machinations.