If it walks like a duck ...

NASPERS’ CHAIR SEEMS OUT OF TOUCH WITH SHARE­HOLD­ERS All South Africans must hold the pri­vate and pub­lic sec­tor to ac­count – with­out fear or favour.

The Citizen (KZN) - - BUSINESS - Sasha Plant­ing

Un­der in­tense pres­sure, Mul­tiChoice an­nounced it would con­duct an in­ter­nal in­ves­ti­ga­tion into its re­la­tion­ship with ANN7 and the fair­ness of its com­mer­cial agree­ment. That is a good step.

It’s very easy to throw stones and point fin­gers while sit­ting in a board- or liv­ing room. South Africans love the moral high ground. But what about when tak­ing a stand costs you?

In­vest­ment man­age­ment firm El­e­ment doesn’t hold Naspers in any of its funds – it be­lieves Naspers and its as­so­ciate Ten­cent are over­val­ued. This, says CIO Ter­ence Craig, has cost the fund re­cently in terms of rel­a­tive per­for­mance as a re­sult of Naspers’ cur­rent dom­i­nance within SA Eq­uity bench­marks.

El­e­ment also deems Naspers’ en­vi­ron­men­tal, so­cial, gov­er­nance (ESG) con­cerns as ma­te­rial, war­rant­ing a sig­nif­i­cant dis­count in its val­u­a­tion.

“No one cares about ESG is­sues un­til the share price falls,” he says. In other words, it’s easy to ig­nore lapses in gov­er­nance when it suits you. His con­cerns aren’t only about the ex­ec­u­tive re­mu­ner­a­tion pol­icy and the dual class share struc­ture that sees di­rec­tors and oth­ers aligned to them con­trol­ling 68% of shares.

“ESG is­sues in gen­eral are not a pri­or­ity in this com­pany. You have a sit­u­a­tion where Koos Bekker takes [sab­bat­i­cals] and both times sells a ma­te­rial por­tion of his shares, but the mar­ket only learns of this via the an­nual re­ports sev­eral months later and not via a SENS re­lease at the time of sale. That is fol­low­ing the let­ter, but not the spirit of the law and it is con­cern­ing.”

He adds that Naspers’ hold­ing struc­ture of Ten­cent is much more com­plex than it ap­pears and any as­so­ci­ated risks war­rant fur­ther clar­i­fi­ca­tion. These and other is­sues will be well ven­ti­lated at Naspers’ first off­shore in­vestor day in New York on De­cem­ber 12.

Pic­ture: Bloomberg

Sta­tis­tics SA’s min­ing pro­duc­tion data reveals min­ing out­put is up 5.2% year-on-year in Oc­to­ber, from a re­vised -0.3% year-on-year in Septem­ber, Reuters re­ports.

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