Perhaps nothing from the group that brought South Africans news of a biologically impossible decuplet-birth should surprise us; that said, last week’s announcement by Sekunjalo subsidiary African Equity Empowerment Investments (AEEI) that British Telecom was not entitled to claim back the 30% stake in BT South Africa held by AEEI was a little puzzling.
Presumably, BT is also a little puzzled by the announcement.
The battle over who actually owns the stake, which began early this month, looks set to play out for some time with AEEI advising shareholders last Thursday to continue exercising caution “until further announcements in respect of the BT call option are made”.
The close business ties between BTSA and Iqbal Survé’s Sekunjalo Group date back to 2008 when Sekunjalo Investment (subsequently renamed AEEI) became BT’s South African BEE partner. The 30% stake was understood to be a significant money-spinner for Sekunjalo Group, so much so that after its controversial December 2017 listing Ayo – another offshoot of Sekunjalo – “acquired” the stake for R990 million.
The R990 million was a little under one quarter of the R4.3 billion the Public Investment Corporation (PIC) had pumped into Ayo at the time of the listing.
Whether or not it was Sekunjalo’s statement, made during a presentation to parliament earlier this year, that Ayo was the proud owner of the 30% stake in BTSA that irked BT is unclear. It wasn’t the first time Ayo had stated this, and it wasn’t the first time BT had indicated that it opposed it.
Last week a BT spokeswoman would only tell TechCentral: “There were factually inaccurate statements made by the Sekunjalo Group to the Standing Committee on Finance. We were not aware, nor in agreement with, the assumptions made in the pre-listing statement conditions of Ayo Technology Solutions that referred to BT South Africa. This has left us with no other option but to correct the record and terminate the relationship with Sekunjalo.”
BT is adamant the transfer to Ayo never took place and earlier this month said: “We have initiated the termination process with the Sekunjalo Group in line with the shareholder agreement in place.”
Oh no you don’t, was essentially AEEI’s response at that stage, not before we check whether the terms of the agreement with BT have been breached. Apparently, the agreement allows BT to repurchase the shares “in the event of an act or omission which is not remedied within 60 days”.
Two weeks later – last Thursday (June 17) – AEEI informed BT that the call option “is not capable of being exercised” by BT.
We have yet to hear what BT has to say about AEEI’s latest statement, but it is unlikely to agree.
And so, as another bizarre episode plays out in Sekunjalo-land, we are prompted to wonder how Survé’s hugely profitable and long-term relationship with Siemens is surviving.
The inevitable few notes on executive pay …
Meanwhile back in the corporate world, it was entirely down to not-for-profit company Active Shareholder to engage with Nedbank’s remuneration committee last week about concerns over the group’s remuneration policy.
A hefty 34.12% of shareholders attending the AGM last month voted against the policy. However, only Active Shareholder, which helps socially responsible shareholders to exercise their company rights, bothered to pitch up at the meeting Nedbank was obliged to hold with its concerned shareholders.
It does seem institutional shareholders aren’t really that concerned about dealing with the executive remuneration issue.
Presumably, they feel recording a ‘No’ vote helps with their ESG (environmental, social and governance) credentials without risking any real consequences; it is after all nothing more than a non-binding advisory vote.
For a clue as to why our powerful institutions are happy nothing gets done on this front you need do nothing more than check out the remuneration packages paid to senior executives at the likes of Ninety-One, Sanlam and Coronation.
Talking of which, last week Sanlam topped up its gravy train with the purchase of hundreds of millions of rands worth of shares, which will be used to replenish the bonus payments made to its executives.
Also last week Sibanye-Stillwater’s top executives sold off tens of millions of rands worth of shares just to cover the tax liability linked to the take-up of their performance shares.
Zondo Commission extension
As it happens, also last week Deputy Chief Justice Raymond Zondo applied to the high court for another extension to the commission of inquiry into allegations of state capture. He’ll need more money, perhaps R100 million or so.
To date the inquiry – launched three-and-a-half years ago – has cost taxpayers R1 billion.
That’s less than what South African investors and savers have had to pay, over the same period, for a handful of executives who are supposed to be ‘minding’ our money.
And anyone who thinks the Zondo Commission has gone on for too long is probably not a former shareholder of Steinhoff.
That long-running saga looks far from ending given the recent developments in the Western Cape High Court. These will surely make it difficult for Steinhoff to stick to the scheduled plan to settle with its creditors.