Sanlam shrugs off reports of takeover

● Nothing to see here, said Sanlam CEO Ian Kirk about reports this week that the insurance giant was planning to take over Alexander Forbes’s short-term insurance business.

Sanlam, which is not a shareholder, is regularly in talks with Alexander Forbes, Kirk said, but not about buying the business.

“I’ve had no merchant banks in my office about [Alexander] Forbes,” Kirk added.

Business Report this week published a report citing unnamed sources and leaked emails titled “Alex Forbes is facing a ‘de facto’ takeover”.

Alexander Forbes soon responded on the Stock Exchange News Service and said its board had reason to believe confidential information had been leaked by a disgruntled former employee. It did not name the employee, but said fiduciary duties were breached, indicating that he or she was also a board member.

“The board has accordingly instituted an investigation in this regard, and will consider any and all legal avenues available to it to protect the company’s confidential information,” Alexander Forbes said in a statement.

It said the reports were in many respects factually inaccurate and contained speculative and misleading comment and relied on unrelated and dated information.

The financial services group last year fired Andrew Darfoor as CEO after two tumultuous years at the helm. Business Report, citing unnamed sources, reported that Darfoor was ousted after resisting attempts to have Alexander Forbes exit its short-term insurance.

“It is the company’s standard approach not to fuel and engage in speculation. The most recent activities, however, are of such a serious nature that the board considered it prudent to address these matters,” said Alexander Forbes.

When Darfoor was shown the door last year, it was because the board said it had lost confidence in him. Darfoor has since taken the company to the Commission for Conciliation, Mediation and Arbitration (CCMA).

An e-mail penned by African Rainbow Capital Investments (ARC) CEO Johan van Zyl to some Alexander Forbes board members forms part of the leaked documents. ARC, chaired by billionaire Patrice Motsepe, is Alexander Forbes’s third-largest shareholder. ARC is also involved in Sanlam as a shareholder and empowerment partner.

Motsepe has made no secret of his plans to build a fully empowered financial services empire. Where and how Alexander Forbes fits into his plans has been widely speculated on, especially when former Sanlam executive Dawie de Villiers took Darfoor’s position shortly after his departure.

Both Sanlam and Alexander Forbes said they would update the market if necessary about possible transactions.

“We want to build as strong a business relationship with them as we can. We have lots of discussions with them about lots of things, and we will continue to do that,” said Kirk.

But these engagements were a normal part of business, he added.

Darfoor could not be reached for comment.