Anglo exit from SA the ‘right thing to do’
Oppenheimer says move to London was 100% correct
NICKY Oppenheimer never expected to receive the portrait of his grandfather, Sir Ernest Oppenheimer, which his son Jonathan fell in love with while working in Anglo American’s Harare offices in Zimbabwe.
The picture arrived accidentally at the Parktown offices of Ernest Oppenheimer & Son six months after Anglo chairman Sir John Parker had said he could not give him the picture as it was part of the company’s heritage.
Caught in the moral dilemma whether to keep the picture or return it, he decided to return it.
After Mark Cutifani joined the company as CEO in 2013, Nicky Oppenheimer told him the story and soon after was surprised with the portrait that now adorns the family’s offices.
The portrait joined the family’s other pieces of artwork from Anglo’s South African headquarters on 44 Main Street in Marshalltown when the last family patriarch left his board seat six years ago.
The group’s headquarters are now in the heart of London, at Carlton House Terrace. The family who started Anglo have all but left. The family now has a stake of only 0.9%, far from the days when through its De Beers ownership it controlled the company.
“It is obviously a wrench when something like that comes to an end,” says Nicky Oppenheimer, the last member of the family to sit on the board of the company founded by his grandfather, Ernest Oppenheimer.
“But it was the right thing to do,” he says of letting go of the bulk of its shareholding.
“Anglo was becoming strange and more normal.”
Although some historical attachment to it remains, there is a distance between the Oppenheimer family and Anglo American, he says. “So much has changed, we would view those shares as anything — basically, if we thought the price was high we would sell them.”
In the past, the family name was synonymous with Anglo American, but that recognition is no longer there. That is the way of things, Oppenheimer says.
One former employee who was being groomed as an executive recalls being told by a human resources officer at his first interview that Anglo was a family business. He and his wife less LAST PATRIARCH: Nicky Oppenheimer, Anglo American founder Ernest Oppenheimer’s grandson, is a philanthropist and former chairman of the De Beers diamond-mining company and of its subsidiary, the Diamond Trading Company. He was also deputy chairman of Anglo American attended several dinner parties where he got the sense he was being sussed out slightly. He even recalls a colleague asking him if the senior executive was checking on their table manners.
Before the group’s move to London, says Oppenheimer, Anglo had many of the hallmarks of being a private, family-run company, particularly under his father, Harry, and grandfather.
“It was always a strong theme, I think, of my grandfather’s and father’s — that the people you wanted to do business with needed not only to be your business colleagues, they needed to be your friends, and that meant you ended up with people of a similar ilk,” says Oppenheimer.
That business ethos came to an end when the company made its move to London in 1999.
The affinity of Anglo executives with British culture eased the move. It is often said that in a family business the third generation tends to lose track of the great vision. Nicky Oppenheimer, the grandson, was criticised for seeming not to have as much dedication as his father and grandfather had when he took over as deputy chairman of De Beers and Anglo.
That change from family to corporate was cemented when Cynthia Carroll, the first female CEO — who wasn’t part of the old boys’ club that had studied philosophy, politics and economics at Oxford University — came in.
A necessary change, many say. Although Anglo American in 2007 was no longer a family business, it was still a business like no other. In a rapidly changing world, Anglo wanted global attention — and needed it if it was to survive and thrive.
Sir Mark Moody-Stuart, a former Shell and Anglo American chairman, says the board had a profile in mind when it was choosing Anglo’s next CEO after Tony Trahar stepped down.
“We wanted someone who had worked and lived globally, who could co-operate and approach governments and was familiar with dealing with government, who could build a united Anglo and, very importantly, look at expanding and acquiring [assets] in different parts of the world and in key minerals and metals.”
Although Trahar was not an Oxford graduate, the culture was in his bones, having worked for the Oppenheimers straight out of Wits University and for the next 33 years before retirement.
He says the ethos was “an absolute gift, to have the steady Oppenheimer strategy for most of the company’s development”.
Many criticised the ethos and culture as it favoured the family, but this proved to be the bedrock of conservative management and benefited the political foothold on which Anglo American was building its empire through the ’70s and ’80s.
It was estimated that in the ’80s Anglo had 1 300 subsidiaries and affiliated companies, providing almost everything South Africans would want, from cars to banking and insurance to travelling.
The company was not only a South African economic beast; it was entrenched in its politics, Harry Oppenheimer having once had a seat in parliament.
However, Nicky Oppenheimer says it was never true that Anglo controlled the South African economy. “No company can control a government. When I was younger, the American steel companies thought they could hold the American government to ransom and they were absolutely wrong.”
But he admits Anglo was a political animal in its own right.
In the pre-democratic era, he says, Anglo was very clear on its political views and so were the leaders of the company. He adds, with slight hesitation, that his father and grandfather would be proud of the business now, although much has changed: “I hesitate only slightly because life was much easier in the days they were in business.”
Indeed, a lot has changed since Ernest and Harry ran the Anglo American empire.
In 1960, three years after Ernest’s death, Harry tried to take Anglo global. He listed two obstacles: foreign-exchange controls, which made it difficult to move money offshore, and the Sharpeville massacre in March 1960, which saw 69 black pass-law protesters shot dead.
The tragedy shook foreign investors, making them wary of South Africa and its future.
One commentator, who has watched the company closely since the ’80s, says while foreignexchange controls were a hindrance to Anglo, they were a godsend to South Africa, benefiting the country greatly. Although Anglo would have wanted to invest overseas, it couldn’t, and so was always looking for new deals, in mining, manufacturing or transport.
The thirst for expansion drove Anglo into becoming one of the most innovative companies in South Africa’s history, demonstrating the technical and financial capability to achieve anything it set its mind to.
Economists say it was always going to be difficult for Anglo to list in London before 1994. It was the archetypal South African company; the government was going to disagree and the world was further distancing itself from apartheid.
The company had tried a number of times before democracy.
“Anglo was unable to accumulate enough assets with the mining sector and so they got into other areas. It was an outlet for their accumulating cash flow and they had nowhere else to go,” one economist says.
Anglo’s last executive chairman, Julian Ogilvie Thompson, said in a shareholders’ letter before its London listing that the company saw itself as a mining house rooted in South Africa.
The London listing in 1999 created a lot of possibilities for the company, says Trahar. He was part of the committee that oversaw the primary listing in London. Shareholders did not understand the complex structure of Anglo American, he says. They wanted to invest in mining.
The committee spent almost two years preparing the way for the listing — from 1997 when the unbundling of non-mining assets started, to 1999, when the dual listing, and the merger with Minorco were announced.
Nicky Oppenheimer agrees, saying the move to London was 100% right. But he admits that no one on the executive team really appreciated the changes required to become a Londonbased company.
London was an obvious destination for the company. This was where its global competitors, BHP Billiton and Rio Tinto, were. It was the capital of financial markets and the time difference between the two countries helped to make it seamless.
Some insist that Anglo betrayed South Africa by leaving its shores. Others have criticised the way the company left, selling off non-mining companies it had built up over decades.
Many believe the company could have achieved what it wanted while still based at 44 Main Street, but it is from London that this ship is now steered.
It was no longer a family business, but still a business like no other Anglo American never controlled the South African economy