Watershed shareholder moment
Ray Mahlaka
Like Group Five and Net1 UEPS, PPC is having its watershed shareholder activism moment.
PPC is the latest to see a wave of asset managers that are taking an activist approach – flexing their muscles and finally having a say about the direction of the companies they invest in on behalf of clients.
On Friday, PPC chair Peter Nelson bowed to increasing shareholder pressure by agreeing to step down amid growing concerns about the company’s recent foiled merger with AfriSam. He will be replaced by Jabu Moleketi.
Moleketi was a deputy finance minister under the Thabo Mbeki administration and made a transition to the business sector in 2008. He was the preferred choice of PPC shareholders, including Prudential Investment Managers and activist investment firm Value Capital Partners.
Wholesale changes were also made to the board, with shareholders influencing the appointment of other board members, including Luvuyo Mkhondo and Anthony Ball as non-executive directors.
Recent corporate events are showing that fund managers are increasingly becoming activist instead of only collecting inflation plus 5% returns for their clients.
Net1 UEPS’ largest shareholders, the International Finance Corporation and Allan Gray, recently forced the company’s board to fire controversial CEO Serge Belamant and other board members.
Belamant’s sacking was due to questionable practices of Cash Paymaster Services – the Net1 subsidiary that is responsible for distributing more than 10 million social grants – in profiting from its contract with the SA Social Security Agency.
Five board members resigned at Group Five in 2017 after pressure from its largest shareholder Allan Gray, which disagreed with the future direction of the company.
PPC Shareholders call the board changes “fresh” in helping the company to improve its cement operations.
Prudential is satisfied with the board changes but it would still like to see a further strengthening of the PPC board, said the asset manager’s Chris Wood. “[This is] with a view to bringing improved oversight to the group, from individuals with relevant industry experience and corporate expertise.”