Phumelela boss quits after 10 years in charge
Fears of taint of Steinhoff implosion cited
dineo.faku@inl.co.za PHUMELELA Gaming and Leisure chief executive Rian du Plessis yesterday resigned, as fears mounted that the horse racing and betting group risked being tainted following the implosion of retail giant Steinhoff International.
Du Plessis quit after 10 years at the helm of the company, allegedly as shareholders raised concerns about his close relationship with former Steinhoff chief executive Markus Jooste and Phumelela’s exposure to the ailing furniture retailer.
Jooste’s horse management company, Mayfair, holds the second biggest shareholding in Phumelela through Kalamojo Trading and Investment, and owns a 9 percent stake of the company. Mayfair is now insolvent after amassing almost R1.6 billion of defaulted loans. The company had reportedly been selling off some of South Africa’s best thoroughbred racehorses since December after Absa approached the High Court to freeze the company’s assets and liquidate it to recuperate R266 million.
Ian Cruickshanks, the chief economist at the SA Institute for Race Relations, said Du Plessis’ resignation had come as a surprise. “You may ask why now? Perhaps he has decided that he has had a good record at Phumelela and that he has to move forward.”
He said he was cautious about the shares. “If you ask if I would go out and buy the shares, I would wait until the results are out,” said Cruickshanks.
The Steinhoff scandal, which saw Jooste resigning in December after the company lost more than 90 percent in value, raised fears within the horse racing community that horse prices could decline sharply.
Steinhoff is estimated to have wiped off more than R90bn in value after the scandal in which shareholders blamed Jooste for the irregularities.
Phumelela is licensed to operate horse racing across the country. It boasts the TAB trademark which is one of the most recognised and trusted brands in the gambling industry, as well as online, and phone betting and gaming services.
Jooste is believed to own a 4.71 percent stake in Phumelela in his personal capacity. Phumelela has lost 23 percent in the year to date and traded at R13.40 a share yesterday.
Du Plessis cited personal reasons for the resignation.
“Rian has full confidence in the company’s executive management team, underlying business fundamentals and strategic direction and has undertaken not to dispose of any Phumelela shares held directly or indirectly by him, his family or otherwise in the foreseeable future,” the company said in a statement.
The company said John Stuart, who is currently the group’s executive director for international operations, will replace Du Plessis as chief executive.