Wiese’s molehill …
Back in late 2016, I attended a very uncomfortable Invicta Holdings AGM. I had just written a cover story on the industrial supplies conglomerate that highlighted the stark difference in perceptions between the Invicta executives and some of its minority shareholders around the detail issued on a reportable irregularity raised on part of a share repurchase exercise.
Invicta chair and major shareholder Christo Wiese dismissed my effort as making a mountain out of a molehill. The issue, really, was that Invicta did not offer a surfeit of detail on the reportable irregularity in its financial statements … or even at the AGM.
Wiese asked me: “What sort of detail do you want … what more do you want to know?”
For those who need reminding, Invicta positions held by certain deepleveraged Invicta executives (present and former) were involuntarily closed out by financial institutions, and sold into the market. Supposedly these shares were inadvertently bought back as part of a share repurchase exercise by Invicta associate Hulumani.
These transactions should have been flagged as a specific share repurchase, which required a special authority from shareholders. Though Invicta corrected the trades later, the JSE censured the group. At the time certain minority shareholders remained baffled by this oversight. Surely Invicta directors knew there was a share buyback in place?
The matter was seemingly laid to rest … until last week, when Invicta informed shareholders that the JSE had now received information alleging the company and its directors “did not fully and accurately disclose all the relevant facts to the JSE during the course of the JSE’S 2016 investigation, and had failed to rectify this despite the issue having been raised with members of the company’s audit committee”.
The JSE wants responses to these allegations, but Invicta says it’s not aware of the alleged impropriety.
Invicta shareholders are clearly a little jittery around developments.
Readers will no doubt remember Wiese famously dismissed, as “drivel”, talk that Steinhoff International’s reputation was at risk after allegations of accounting fraud and inflated profits.
Invicta shareholders, just getting to grips with a sizeable tax settlement charge around its empowerment structures, will be hoping Wiese’s “molehill” remark does not come back to haunt him.
Not a grand development
The board of empowerment company Grand Parade Investments (GPI), headed by the combative Hassen Adams, believes it is under siege from activist shareholders who don’t have the interests of the original community shareholders in mind.
But there’s been some awful timing for Adams in that a court case seeking to remove Adams and others as trustees from the Hout Bay Development Trust was concluded last week.
In delivering a ruling, judge Dennis Davis noted: “One gets the impression Adams was not interested in holding trustees’ meetings, and that it suited him to exercise sole control over the trust.” Davis concluded that several breaches of duty warranted the removal of Adams from the trust.
The damning line was that Davis said: “My findings regarding Adams’ conduct of the affairs of the trust leave me in no doubt that his removal from office as a trustee is necessary in the interests of the proper administration and functioning of the trust. He has imperilled the proper administration of the trust, and its property, and has shown he is not a fit and proper person to serve as a trustee.”
Of course, these developments have little bearing on GPI per se … but there’s no doubt it could strengthen the cause for additional oversight in the boardroom as the group looks to improve returns to shareholders.
The JSE wants responses to these allegations, but Invicta says it’s not aware of the alleged impropriety