‘In­de­pen­dence’ the is­sue at Group 5

The Star Early Edition - - COMPANIES - Roy Cokayne

AL­LAN Gray, whose clients own 25 per­cent of Group Five, says its mo­tive for calling a meet­ing of the listed con­struc­tion and en­gi­neer­ing group’s share­hold­ers was not re­lated to the com­pany’s strategy but the in­de­pen­dence and ex­per­tise of its board.

An­drew Lap­ping, the chief in­vest­ment of­fi­cer at Al­lan Gray, con­firmed yes­ter­day that the as­set man­age­ment com­pany had lost faith in the abil­ity of Group Five’s board to act in the best in­ter­ests of all stake­hold­ers, given its un­sat­is­fac­tory re­sponse fol­low­ing the large num­ber of res­ig­na­tions of key in­di­vid­u­als in re­cent months.

“They have been un­able to re­gain our trust fol­low­ing nu­mer­ous meet­ings and en­gage­ments,” Lap­ping added.

“Our mo­ti­va­tion is not re­lated to Group Five’s strategy, in­volv­ing the un­bundling of as­sets, or oth­er­wise. We sim­ply want a board that is in­de­pen­dent, with the rel­e­vant skills that will pro­tect and grow value for all stake­hold­ers,” he said.

The at­tempt to change Group Five’s board will come to a head at a share­hold­ers’ meet­ing that is sched­uled to take place on July 24.

Five of the seven mem­bers of the board an­nounced their res­ig­na­tions on Fri­day. This left re­cently ap­pointed chief ex­ec­u­tive Themba Mo­sai and chief fi­nan­cial of­fi­cer Cristina Teix­eira as the only sur­viv­ing direc­tors.

Al­lan Gray’s sug­gested nom­i­nees to the board in­clude for­mer Group Five man­ag­ing di­rec­tor Mike Up­ton.

Lap­ping said that, if elected, Al­lan Gray’s sug­gested nom­i­nees would re­sult in a more trans­formed board that com­plied with the spe­cific cri­te­ria, in­clud­ing rel­e­vant ex­per­tise, ex­pe­ri­ence, con­ti­nu­ity and in­sti­tu­tional mem­ory, sen­si­tiv­ity to his­tor­i­cal in­dus­try be­hav­iour, fun­da­men­tal and strate­gic com­mit­ment to trans­for­ma­tion, ex­e­cu­tion of the com­pany’s strategy to de­liver across the full in­fra­struc­ture life cy­cle, and max­i­mum share­holder sup­port.

Lap­ping said Al­lan Gray be­lieved that Up­ton met th­ese cri­te­ria.

“Mike was recog­nised for proac­tively ini­ti­at­ing the in­ves­ti­ga­tion into in­dus­try col­lu­sion. Un­der his tenure, Group Five was re­warded for this proac­tive ac­tion with the grant­ing of amnesty and did not have to pay any puni­tive fines.

“It is our opin­ion that a new non-ex­ec­u­tive board will be able to pro­pel the com­pany for­ward and en­sure Group Five con­tin­ues to play an im­por­tant role in the fu­ture of South Africa,” he said.

Up­heaval

The ex­ec­u­tive man­age­ment and board up­heaval at Group Five started in Fe­bru­ary, when the group an­nounced that chief ex­ec­u­tive Eric Ve­mer would leave within a few weeks and that en­gi­neer­ing and con­struc­tion ex­ec­u­tive di­rec­tor and mem­ber of the ex­ec­u­tive com­mit­tee Wil­lie Zeelie would leave at the end of March but would con­tinue work­ing for the group un­der a con­sul­tancy agree­ment for 12 months.

Other res­ig­na­tions since then in­clude Jon Hil­lary, the com­pany’s for­mer group ex­ec­u­tive com­mit­tee mem­ber and head of investments and con­ces­sions, and Jesse Doorasamy, a for­mer ex­ec­u­tive com­mit­tee mem­ber and head of hu­man re­sources.

Al­lan Gray has nom­i­nated five new direc­tors and the Public In­vest­ment Cor­po­ra­tion and Mazi Cap­i­tal have each nom­i­nated two.

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