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.
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.