"I'm under no instruction from any specific shareholder," says Chairman Emslie.

JOHANNESBURG - African Dawn Capital (JSE:ADW) Chairman Robert Emslie has dismissed conspiracy theories that some party plans to capitalise on the group's weakness.

Emslie says he's heard the theories. "In the discussions and meetings I've had there is nothing to suggest that. I'm not under instruction from any specific shareholder."

The conspiracy theories arose after the company's three most important executive directors were unceremoniously booted off the board. There followed a massive adjustment to the previous year's profits as well as the writing off of goodwill.

Emslie says that before his appointment he met with some of Afdawn's biggest shareholders, as well as Nedbank, which is the company's biggest controller of votes. He says it was made very clear that he was not at Nedbank's behest, and he is expected to act independently.

Emslie, the former CEO of Absa Corporate and Business Bank, confirmed that he was brought on to the board at the request of Afdawn's designated adviser, Vunani Capital.

Critics say that the manner in which the ousting was done has damaged Afdawn, perhaps irreparably. They also question whether the financial "adjustments" are really warranted and ask if some players will somehow capitalise on the depressed share price.

Last year Afdawn traded as high as R5.39. It is currently trading below 50c.

So far, there has been little in the way of hard facts offered to support the conspiracy theories.

But that is not to say none exist. Consider, for example, that one of three "independent" non-executive directors appointed to the Afdawn board is Christo Wiese, the former registrar of banks and current chairman of a company called Delta Mining.

Delta Mining currently owes Afdawn about R5m. It is not clear how this loan arose.

It has been alleged that the loan to Delta Mining has been impaired under Wiese and his fellow non-execs. Delta Mining CEO Heine van Niekerk is reportedly a former friend of erstwhile African Dawn CEO Marius van Tonder.

This allegation is not true, says Emslie. He notes that "Afdawn has all intention to recover the loan in full, including interest."

Emslie notes that Wiese recuses himself from discussions involving the Delta Mining loan.

Emslie says that while R5m is a lot of money, it is small when compared with Afdawn's overall loan book.

So what are the next steps for Afdawn?

"When we got together as a new board we said there are three things to do," answers Emslie.

The first of these tasks was to get half-year figures to August 31 out. Emslie says he expects to meet the JSE's deadline of three-months by a whisker. This suggests shareholders can expect the results within the next two weeks.

"The second thing was to have a look at the assets. That gave rise to the Sens announcement [of October 14] where we wrote off about R450m," says Emslie.

The third task was to look at the long-term viability of Afdawn. Here, Emslie says the board has not yet come to a conclusion, and he is not sure whether a verdict will be published together with the half-year results.

Furthermore, he notes there is "no possibility" of appointing a new CEO while the board is still considering Afdawn's long-term viability.

Van Tonder recently tendered his resignation as CEO. However, he will remain with the company until February 28 2010 "in order to facilitate a hand-over of his duties to the new appointee".

Emslie says that Van Tonder presence has been helpful. "It would be very difficult to have a brand new board with no corporate memory without the CEO being around to assist us with information."

Are debtors taking advantage of the weakness at Afdawn? Emslie says it is theoretically possible for borrowers to use Afdawn's troubles as an excuse to withhold payment, but in practice there should be no more bad debts after the ousting then there were before.

"There are two types of borrowers. The micro-lending books have a whole host of debtors and there is a normal collection programme which a specific staff member heads up and provides us with feedback. The property bridging book has about 65 clients and we look at each of these in detail."

Write to Julius Cobbett: julius@moneyweb.co.za

Intraday

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I have never had less confidence in a board Judged by this interview, this guy is an absolute joke. This board has comprehensively failed shareholders. For institutions of lending CONFIDENCE is everything. All we have had is the rudest and the tersest of communications that have only served . .more to indicate arbitrary impairments and cast aspersion and doubt. The SENS that announced Emslie as the new chair did not refer to his background or experience, and it did not even thank the previous guy, absent as he may have been. These guys cannot even afford basic courtesy, even if just to appear civil. None of the communications from this board have ever sought to substantiate claims of mismanagement, and none have sought to put things in any proper perspective. Rather we get new suggestions of wrongdoing and basic one line all inclusive numbers comprising the latest writedowns, with no attempt to explain what it is about. Now we are told that the very viability of this business is so uncertain that a management cannot be appointed.. for a business that was clearly generating good growing cashflow, and which must clearly still have the institutional capacity to continue to make money as the economy recovers. . .less by Jack on November 17 2009, 23:07 Find this comment inappropriate? Report it

../2.. Yet this.. brand new board with no corporate memory, (his words).. who need van Tonder around to hold their hands, will at its own convenience tell us whether they think the business is viable or not. If they cannot see the viability of . .more the business they are not qualified to provide direction and they should resign. The business model might need tightening and it might need more discipline, but it is essentially proven. The shareholders do believe in the company and we need a board that represents our interests. This new board has failed to take effective control and have failed to install effective management. This board has failed to establish CONFIDENCE. This board has failed to act timely. This board has FAILED, period. Bring back van Tonder as a start. . .less by Jack on November 17 2009, 23:12 Find this comment inappropriate? Report it

Nothing to suggest you are NOT under instruction???!! Too many negatives Mr Emslie, you just admitted to being under instruction I think. Or has Moneyweb misquoted him - NOT! by george on November 17 2009, 23:33 Find this comment inappropriate? Report it

Be my partner, Make my day, Invest like Buffett The attitude of this dud is quite shocking. These coup plotters clearly have a strategy that is at odds with the interests of minority shareholders who invested in the business as built by van Tonder and Co. by Co owner on November 18 2009, 07:08 Find this comment inappropriate? Report it

Whahaha In whos interests are you acting then? by Green Peppers on November 18 2009, 07:55 Find this comment inappropriate? Report it

Just who voted the new members onto the board? Who? You are illigitimate. by Shareholder on November 18 2009, 08:04 Find this comment inappropriate? Report it

Just good friends Finish and klaar. by Selebi said the same thing, strange enough on November 18 2009, 08:13 Find this comment inappropriate? Report it

You should do some reading Mr Emslie Read on HOW TO BE A LEADER IN TIMES OF CRISIS. You have shown absolutely no leadership whatsoever. Maybe Godsell is available? perhaps not. not for this farce. by Coach on November 18 2009, 08:39 Find this comment inappropriate? Report it

How very reassuring OK by Tom Boardman on November 18 2009, 08:48 Find this comment inappropriate? Report it

CMM and Allegro will pull this down with them The safest thing to do is flee this carcass. The dealings of Allegro CMM and Mr. Bakkes will pull this down. All invested in get rich quick property developments that are going nowhere fast. by Sad Lisa on November 18 2009, 09:02 Find this comment inappropriate? Report it

The devil is in the last sentence. Hundreds of millions sunk here. 65 clients The property bridging book has about 65 clients and we look at each of these in detail." These 65 are the problem. what is the value of these??? by Sad Lisa on November 18 2009, 09:06 Find this comment inappropriate? Report it

Afdawn 2008 AR extract African Dawn provides top structure finance to individuals and developers of low-cost (RDP) and affordable housing. The funding is short term in nature and is only available to projects where bulk services (proclaimed land with roads, . .more electricity and water) have been provided. The Short-Term Secured Finance loan book currently has an approximate value of R500m with sufficient credit lines to satisfy growth in the division. . .less by Sad Lisa on November 18 2009, 09:09 Find this comment inappropriate? Report it

Only space for talent... Now I understand why Absa fired you/personal interested you...a 2x4 with bars beckons. by Maria on November 18 2009, 09:47 Find this comment inappropriate? Report it

property bridging book I recall attending a presentation by the old Afdawn execs, where they showed that the property bridging book deals had an average value of over R2m. Emslie has at least one deal of R5m!! Surely that is a substantial book, even if multiplied by . .more 65 clients? Much has also been written on off-balance-sheet values. How is this being brought in? . .less by wicked willy on November 18 2009, 10:01 Find this comment inappropriate? Report it

HISTORY REPEATS ITSELF ONCE AGAIN. Robert was an arrogant twit while a student at the former RAU (1977-1980) and he still is. I would also appoint the likes of him to cover up some problems or to start a palace revolution. I believe Nedbank put him there. Let the all shareholders . .more elect their own Board. These guys are only in it for themselves. Don't hold your breath, though... . .less by AFRICAN WARRIOR on November 18 2009, 10:22 Find this comment inappropriate? Report it

The Delta Mining angle was never an issue This was a small loan in the book of Afdawn. It could not possibly have moved any corporate actions. If this is a normal Afdawn loan then perhaps Delta chairman Wiese knows only too well how much interest they are paying and how little risk Afdawn . .more has actually took. Perhaps that is why he is so interested? Because, as ex registrar of banks, he knows how good the business model is compared to traditional banking in SA? . .less by Red Herring on November 18 2009, 11:54 Find this comment inappropriate? Report it

@AFRICAN WARRIOR perhaps we need to call an AGM where nonrelated parties will constitute the new board? by Mossadi on November 18 2009, 12:02 Find this comment inappropriate? Report it

BASICS BASICS BASICS!! Afdawn aside... Julius Cobbett does it again...for God sake man...get your facts straight...you do this kind of thing on a weekly basis "three most important executive directors were unceremoniously booted off the board. This . .more followed a massive adjustment to the previous year's profits as well as the writing off of goodwill." The adjustment followed the booting, not the other way around. how much are they paying you to write this garbage...do your homework! BASICS BASICS BASICS!! . .less by Michael on November 18 2009, 12:21 Find this comment inappropriate? Report it

@AFRICAN WARRIOR, thanks for the reference It is not as if you would find this losers CV on www.whoswhosa.co.za . The only Emslie on that site is a surfer from East London called Bigfoot... Chairman Robert Emslie must be young to be retired, no? He was fired from Absa, right? And he will . .more save our company, right? The right man for the job, right? . .less by Frank the Prank on November 18 2009, 12:33 Find this comment inappropriate? Report it

BREAKING NEWS: Commissioner dismisses allegations against him Commissioner of Police, Jackie Selebi, has dismissed allegations of fraud and murder levelled against him. He said today that he has carefully investigated all these allegations and could find no substance at all in these charges. He added that . .more these allegations were malicious and that they were spread by a third force that was out to get him. He has therefore declared himself not guilty. The case is now closed. BREAKING NEWS: Director dismisses Afdawn conspiracy . .less by news at one on November 18 2009, 13:06 Find this comment inappropriate? Report it

@Michael Thanks for keeping me on my toes. I do hope your investments are going well. by Julius on November 18 2009, 14:17 Find this comment inappropriate? Report it

PS Julius, who comprised the block that voted the directors off? List of major share holders as at 13 Oct 2009 : Micawber 25.80% Osborne Funds 6.70% Nedcor Securities 4.70% Peregrine Funds 3.90% Stanlib 3.20% TOTAL : 44.3% Who . .more s interests are represented by Micawber? . .less by Jack on November 18 2009, 15:23 Find this comment inappropriate? Report it

BREAKING NEWS: Commissioner dismisses allegations against him Emslie to a T. The "new" board was "arranged". As per Shakespeare along the lines that 'something stinks in the state of Denmark'. Let them call another general meeting now and give all of the shareholders a say in who should be on the . .more new board and who is best capable of taking the company beneficially forward. . .less by another concerned shareholder on November 18 2009, 15:26 Find this comment inappropriate? Report it

The truth will set you free Slowly the true story behind this hostile take-over is appearing. Should Nedbank be allowed to destroy minority shareholders value in this immoral way and in the process drag other reputations down? by Interesting on November 18 2009, 16:00 Find this comment inappropriate? Report it

Designated adviser, Vunani Capital Back to business then, In trying to fathom the machinations of this lot, we have to turn our attention to the DESIGNATED ADVISER now. According to the article, Emslie confirmed that he was brought on to the board at the . .more request of Afdawn's designated adviser, Vunani Capital. (Why shareholders were not involved in choosing their board is of course beyond me???) Well, this new board has made all kinds of allegations of wrongdoing and have suggested fraud, yet no details have ever been forthcoming. All we get is more innuendo and promises of more forensic investigations, but never are the results of these great investigations released or reported. If van Tonder is such a criminal, I am amazed that he is still welcome in the office? Yet Emslie tells us that van Tonder is indispensable. I bet he is, as far as getting on with business is concerned. But it is one thing to boot out the core management, but one cannot neglect to question where the designated advisor and auditors were? Who advised them? . .less by Jack on November 18 2009, 16:01 Find this comment inappropriate? Report it

Vunani Capital ../2.. This new board has now deepened its treasure trove of aspersions. They have swiftly moved from suggesting fraud and mismanagement to now questioning the basic BUSINESS MODEL. No, if the business model itself is in question, then . .more where were the designated advisor and the auditors all this time? Would Julius care to publish for our benefit the JSE requirements for the designated advisor and the role it plays in governance? Please. (The JSEs website is a mess!) I find it a particularly inconsistent line to take for Emslie to accept his authority from this advisor, under who s custodianship the concern operated under what he claims is a false business model. Then we need to ask who Vunani is and what their relatedness spells for the rest of the good folks around here? In the meantime we may consider that the last time I looked Absa was a shareholder of Vanani, Absa being the previous home from which Emslie disappeared in a cloud of smelly smoke. Stanlib is a shareholder in both Afdawn and Vunani, as is Nedbank to some extent through the Old Mutual link. That is my latest info anyway. Whichever way, Vunani needs to be fired and we need a new board chosen by nonrelated shareholders. We should seriously consider reinstating van Tonder. . .less by Jack on November 18 2009, 16:07 Find this comment inappropriate? Report it

Note on the tone and style of Emslie and his board I have above discussed the style of communication emanating from this new board. Emslie appears to be confused. His approach resembles that of a curator, rather than that of a forward looking chairman who represents shareholder . .more aspirations to build the business. Can it possibly be more glaring? He has very clearly positioned himself in a way that is hostile to minorities and to the interests of the company as a going concern. We should be excused for wondering who s interests he really represents, and what those interests spell. For one thing, Nedbank is voting SSF derived shares, but is really a creditor. . .less by Jack on November 18 2009, 16:40 Find this comment inappropriate? Report it

@ Julius My pleasure. Everyone's due their 'share' of mistakes, and in your defense, youre not the only one. Two Fin24 articles "Coup revives Afdawn" and "Palace revolution at Afdawn" thusfar have stated that CMM is a subsiduary of Afdawn. Not to . .more mention Keith, our favourite small cap analyst (smallcaps.co.za) and his ever changing opinion on whether to own or sell Afdawn. I find myself feeling pitty for those who would actually listen to you commentators. Few of you ever seem to do your homework. Im not much for analysts either but at least they have the balls to advise a position I admit though, I am greatful to all of you, because without your conformist rantings, the market would be a far more efficient place, and would likely reflect value far more reliably than it does today. The result obviously being fewer deep value opportunities So in essence, you exist only to serve the enlightened. It is a lowly existance, but a necessary one. Thanks to the pasnic you and your associates have created, many were able (myself included) to enter below 50c, which even after the writeoff's, is a healthy entry point by my standards. . .less by Michael on November 18 2009, 17:57 Find this comment inappropriate? Report it

Micawber? Micawber is the CFD finance vehicle created when Nedbank facilited the previous directors dealings in CFD ADW. Nebbank financed the directors purchases. As the directors are in default on this loan, Nedbank gets the voting power. by Sak on November 18 2009, 19:05 Find this comment inappropriate? Report it

@Michael, the enlightened pr@#k! Hey, go ahead, load up....while it is going cheap! Lots of deep value around here....by your standards. You are already sitting on a nice loss and need to average down. Only 40cps more to go...."everyone is due their share of mistakes", hey? But . .more remember to leave some spare cash for that inevitable rights issue and dilution. How exactly did the writer create the panic? Methinks you are burning big time, hence the annoyance, pompous fart. Talking about poor homework....this is what happens when you fixate on irrelevant detail. Basics, basics, duh. . .less by Bemused (slightly) on November 18 2009, 19:28 Find this comment inappropriate? Report it

. Methinks you're a little slow... by Michael on November 18 2009, 22:01 Find this comment inappropriate? Report it

afdawn... buy low sell high is that not what the new "directors" are aiming for ? drop value ?? isn't it called rape ?? by wary on November 18 2009, 22:09 Find this comment inappropriate? Report it

v7 capital Check out this new company of one Frik Vermaak, Dereck Ellerbeck and Gerhard van Zyl. Also check out the dealings of SPECIFICALLY Frik Vermaak. His motto is only this: What is in it for me. He is the main reason for the collapse of . .more Allegro and the mismanagement of the structures entrusted by CMM and Afdawn. Will not be surprised if Paul Marais benefitted handsomely from some of these dealings at Allegro. Afdawn you need to investigate this bunch of cowboys . .less by PANDA on November 19 2009, 09:01 Find this comment inappropriate? Report it

Action required as a disparate group of minority shareholders clearly unhappy as to what has become of our Company and the current poor information flow we MUST organise our response. Previous management were always available to shareholders and quite frankly our . .more interests seem to me to be more aligned to them than new management. Previous management were major shareholders - yes the SSF mistake did not do them any favours personally - but their interests were aligned to ours. They built this Company and yes they made mistakes BUT that is part of the risk/reward scenario we invested in. In order to have an influence on the direction taken we should be organising and we have to talk with one voice LOUDLY . .less by frustrated on November 19 2009, 09:51 Find this comment inappropriate? Report it

Champion Clearly, a minority champion needs to step forward now and call a special general meeting. These hikackers need to know the people's displeasure. Is anyone going to run with this? by wicked willy on November 19 2009, 10:49 Find this comment inappropriate? Report it

Afdawn business model As a minority shareholder, I'd like to know how a business model that performed fabulously for more than 5 years, can now be in question. Afdawn's business is the simplest thing to understand: you lend money on a short-term basis, you recoup with . .more interest. In my layman's mind, there's nothing questionable about that. This new chairman says nothing about the dealmaking that drives the engine. He just wants to play CYA and get historical figures out. Where has the entrepreneurship gone, then? This Board are a bunch of vultures looking to pick over the carcass of the elephant they shot. . .less by Grumpy on November 19 2009, 11:01 Find this comment inappropriate? Report it

Minorities, not Nedbank, can rule Afdawn If minorities are able to organise, they will be able to regain control and get this ship back on track. We need to develop a common strategy, to be pushed through at a special annual meeting. by Spook on November 19 2009, 12:06 Find this comment inappropriate? Report it

Special General Meeting... note correction, not annual, we need to call a Special General Meeting... by Spook on November 19 2009, 12:07 Find this comment inappropriate? Report it

Minorities will strike a comeback There are rumours flying about that minorities are organising a comeback. This stock is very widely held and a special general meeting will be called shortly to make the voices of the broad shareholder base felt. by Activist on November 19 2009, 13:11 Find this comment inappropriate? Report it

@Activist Do you have any further detail as to the SGM? I for one am going to make the effort to be there. I'd like the big corporates to get a bloody nose over this!! by wicked willy on November 19 2009, 14:29 Find this comment inappropriate? Report it

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