Up­roar in re­sources com­pany as share price falls from R10 to R2.90 in 10 years

The Star Early Edition - - BUSINESS REPORT - Di­neo Faku

IT IS HIGH time Pallinghurst Re­sources ex­ec­u­tives, in­clud­ing chief ex­ec­u­tive Arne Frand­sen, de­liv­ered to share­hold­ers amid dis­dain over in­ap­pro­pri­ate re­mu­ner­a­tion by man­age­ment, among other things.

Busi­ness Day re­ported last week that share­hold­ers might vote against the re-elec­tion of non-ex­ec­u­tive direc­tors and the re­mu­ner­a­tion pol­icy at the com­pany’s an­nual gen­eral meet­ing on Wed­nes­day in Guernsey, Chan­nel Is­lands.

Share­hold­ers felt that Frand­sen and Pallinghurst founder and chair­per­son Brian Gil­bert­son were over­paid and lived high, thanks to gen­er­ous man­age­ment fees, while they watched the com­pany’s share price dwin­dle.

Gil­bert­son, a for­mer chief ex­ec­u­tive at global di­ver­si­fied min­ing giant BHP Bil­li­ton, has been blasted by a mi­nor­ity of share­hold­ers who spoke on con­di­tion of anonymity for Pallinghurst share price demise to R2.92 from R10 a share at its list­ing in 2007 at the height of the re­source boom.

“Many peo­ple backed Pallinghurst, which listed at R10 a share. It is sad to see that the share price has lost value so dras­ti­cally. Gil­bert­son’s cred­i­bil­ity is be­ing ques­tioned,” one share­holder said.

The share­holder also said non-ex­ec­u­tive direc­tors had en­riched them­selves at the ex­pense of mi­nor­ity share­hold­ers.

“In ten years we have earned noth­ing as share­hold­ers and that is un­ac­cept­able,” he said.


Other an­a­lysts said that that share­hold­ers were frus­trated be­cause the non-ex­ec­u­tive direc­tors did not com­mu­ni­cate.

“Most com­pa­nies have in­vestor pre­sen­ta­tions at least once a year and many twice a year, but they kept them­selves far away from share­hold­ers.

“A ma­jor man­age­ment shake up is needed. The busi­ness is be­ing run from off­shore, which is a prob­lem, but the mines are in Zam­bia, Mozam­bique and South Africa”.

“You can­not run a busi­ness from far afield, you have got to be ac­ces­si­ble to the op­er­a­tions,” he said.

Pallinghurst has a R5 bil­lion net as­set value and it is in­vested in the plat­inum group met­als, man­ganese and gem­stones.

Pallinghurst holds a 18.4 per­cent stake in Jupiter, which in turn has a 49.9 per­cent stake in lead­ing man­ganese pro­ducer Tshipi é Ntle, an open pit mine in the Kala­hari man­ganese fields in the North­ern Cape .

Jupiter dis­trib­uted $55 mil­lion (R735.45m) to its share­hold­ers in March, of which Pallinghurst re­ceived $10m.

“We as share­hold­ers have re­ceived noth­ing from the $10m so far. Pallinghurst is sit­ting on the cash,” the dis­grun­tled share­holder said.

Lead­ing sup­plier

Pallinghurst also launched a bid to ac­quire Gem­fields, the world’s lead­ing sup­plier of re­spon­si­bly sourced coloured gem­stones such as ru­bies.

Peter Ma­jor, Di­rec­tor Min­ing at Cadiz Cor­po­rate So­lu­tions, said that Pallinghurst had also been blamed for the neg­a­tive im­pact on its Sed­i­belo plat­inum min­ing project in the Pi­lanes­berg na­ture re­serve.

He be­lieved the share­holder re­volt was long over­due.

“These direc­tors should have been turfed out a long time ago.

“Es­pe­cially with what they did in the Pi­lanes­berg.

“That Sed­i­belo mas­sive open pit cash sucker mon­stros­ity never should have got­ten the go-ahead!

“It de­stroyed a lovely part of the coun­try for­ever,” Ma­jor said.

Pallinghurst’s largest share­hold­ers in­clude Christo Wiese, with 19.6 per­cent, fol­lowed by Old Mu­tual In­vest­ment Group with 9.46 per­cent and Oa­sis As­set Man­age­ment with 9.04 per­cent.

Oa­sis Cres­cent Cap­i­tal owns an­other 6.22 per­cent.

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