Bad times could be good for Reinet

But ac­tivist Botha rails against ‘re­lated party’ is­sues

Finweek English Edition - - News -

AL­THOUGH A COL­LEC­TIVE GROAN went up when cor­po­rate ac­tivist Theo Botha be­gan a lengthy in­ter­ro­ga­tion of chair­man Jo­hann Ru­pert at last week’s Rem­gro meet­ing, share­hold­ers got full value from the en­su­ing in­ter­ac­tion. In fact, share­hold­ers might be won­der­ing if Botha in­ad­ver­tently brings out the best in Ru­pert – who cer­tainly went a long way to pla­cate any jit­ters share­hold­ers might have about Rem­gro and Richemont’s re­struc­tur­ing in the mid­dle of a se­vere global fi­nan­cial cri­sis.

Other than Botha’s ques­tions there wasn’t a sin­gle in­ter­jec­tion or en­quiry from the more than 100 share­hold­ers as­sem­bled at the Erin­vale Ho­tel in Som­er­set West. Botha’s line of ques­tion­ing was cer­tainly not ap­pre­ci­ated by Rem­gro di­rec­tor Dil­lie Mal­herbe – who, per­haps un­nec­es­sar­ily, showed sup­port for his chair­man by sug­gest­ing Botha was talk­ing non­sense.

But it was Botha’s en­quiries about Reinet In­vest­ment Ad­vi­sors – the com­pany con­trolled by the Ru­pert fam­ily to man­age soonto-be listed Reinet In­vest­ments – that en­sured share­hold­ers got their money’s worth at the meet­ing. De­pos­i­tory re­ceipts in Reinet In­vest­ments will be un­bun­dled to Rem­gro share­hold­ers later this month as part of a re­struc­tur­ing process cen­tring on the un­bundling of Rem­gro and Richemont’s shares in Bri­tish Amer­i­can To­bacco (BAT).

Reinet In­vest­ment Ad­vi­sors will earn a 1% fee on the “in­vested as­sets” in Reinet In­vest­ments (which will ini­tially com­prise a 3% to 4% stake in BAT and other smaller in­vest­ments) and a 10% per­for­mance fee on the cu­mu­la­tive re­turns earned for share­hold­ers.

Botha’s in­fer­ence was that Ru­pert would earn money without tak­ing any risk through the Reinet In­vest­ment Ad­vi­sors’ struc­ture. He even ques­tioned why the sep­a­rate in­vest­ment ad­vi­sory com­pany took the name “Reinet” when it was in fact an un­re­lated en­tity.

Ru­pert replied the Reinet tag was added to the in­vest­ment ad­vi­sory com­pany be­cause he was tired of nam­ing com­pa­nies af­ter the Ru­pert fam­ily.

Botha told Fin­week af­ter the AGM that Reinet In­vest­ment Ad­vi­sors could eas­ily be mis­taken for a sub­sidiary of Lux­em­bour­glisted Reinet In­vest­ments. “I don’t know why Reinet sim­ply doesn’t em­ploy peo­ple in the com­pany and pay them from within the listed com­pany. Why do we need a sep­a­rate in­vest­ment man­ager out­side Reinet In­vest­ments?”

Cou­pled to the fee struc­tures re­gard­ing Reinet, Botha also ques­tioned the “forced” do­na­tion of 10% of Rem­gro share­hold­ers’ BAT al­lo­ca­tion to Reinet In­vest­ments. Botha con­tends Rem­gro share­hold­ers should be given the choice of keep­ing all their BAT shares or do­nat­ing 10% to par­tic­i­pate in Reinet In­vest­ments.

Ru­pert stressed the in­jec­tion of BAT shares into Reinet In­vest­ments would en­sure the new in­vest­ment ve­hi­cle was of suf­fi­cient size to at­tract the top tal­ent in the in­vest­ment man­age­ment sec­tor. The un­der­ly­ing mes­sage from Ru­pert was that Reinet In­vest­ments – which will pub­lish its prospec­tus shortly – could be well po­si­tioned amid tur­moil on global in­vest­ment mar­kets in terms of se­cur­ing qual­ity as­sets at good prices and at­tract­ing

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.