The use of credit card rewards points for personal gain appears to be the reason behind the sudden resignation of Arrowhead Properties co-founder and CFO Imraan Suleman.
Arrowhead told the market on Wednesday that Suleman had resigned, following an “instance of unauthorised use of company resources”.
The “company resources” in this instance refers to the use of the company’s credit card reward points, valued below R100 000, by Suleman for his personal gain and not to the benefit of the company.
This was confirmed by CEO of Arrowhead Properties Mark Kaplan after two sources told Moneyweb that Suleman’s sudden departure was linked to his use of the company’s credit card.
“The resources concerned were rewards points on a corporate credit card, some of which, on the face of it, was used for personal and not corporate expenditure. It is with great difficulty that the company had to go through this [accepting Suleman’s resignation],” said Kaplan.
Without specifying on the exact amount that Suleman spent, Kaplan said it is an “immaterial amount” but acknowledges that the misused funds could have been used to reduce Arrowhead’s costs. “The value of the money that was spent makes no difference to the company. Fortunately, there won’t be a financial impact,” he said.
It is unclear at this point what Suleman spent the credit card rewards points or money on. He didn’t respond to messages for comment when Moneyweb reached out to him.
Suleman’s resignation comes at a time when the JSE faces a revolving door of executives, who have mostly resigned in recent weeks or have been suspended for obscure reasons including Old Mutual CEO Peter Moyo.
It also comes at a time when Arrowhead – which owns a portfolio of retail, office and industrial properties valued at R5.7 billion – is in the process of merging with its counterpart Gemgrow.
Arend de Kock, who has been with Arrowhead for five years, has been appointed acting CFO, replacing Suleman.
Kaplan said Arrowhead wanted to embark on a disciplinary process after the company discovered Suleman’s misuse of company funds. But he chose to “unfortunately” resign after he was informed of the disciplinary process. He has offered to repay the money.
The market largely lauded Arrowhead for its level of disclosure regarding the reason behind Suleman’s resignation.
However, one analyst, who didn’t want to be named, wanted more disclosure from Arrowhead on what Suleman spent the company funds on. He also questioned why Suleman, who took home a salary of R5.1 million in 2018 and was set to receive R5.4 million this year, would fall on his sword over a credit card spend of less than R100 000.
Suleman was also entitled to a short-term incentive (bonus) of R3.2 million.
Kaplan ruled out the possibility of Suleman receiving a separation package, also known as a golden handshake. “There is no pay-out or package with the resignation,” he says.
Suleman also holds 272 064 shares in Arrowhead, which were purchased using a loan from the company valued for R1.3 million. Repayment of the loan is due by January 2021. With Suleman’s resignation, Kaplan said the repayment of the loan will have to go through a board process and decision.