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Desperate times, desperate measures …

But for how long can the gravitational tide of the markets be stemmed? Plus a look at Steinhoff, Sasol, Shoprite, Truworths, and Adapt IT.
Complexity strategy? Naspers already has ‘A’ and ‘N’ shares and now Prosus is set to create high-voting ‘B’ shares. Image: Dario Pignatelli, Bloomberg

In the 11th Century, King Canute of England, Denmark and Norway was determined to demonstrate to his sycophantic courtiers that he did not in fact enjoy the powers of God; for instance, he could not hold back the tide.

To prove it he placed his throne on the seashore and commanded the incoming tide to halt. To no avail – all his fancy royal gear got soaked. It’s not known if this inevitable soaking dulled the sycophantic fervour of his courtiers. Probably not.

Every time Naspers comes up with another plan to defy the gravitational pull of the markets, King Canute’s beach-based reality-checker comes to mind.

Each new complex financially-engineered proposal seems to represent another shift away from reality; another attempt by the courtiers to prove they can halt the gravitational tide of markets.

How do you imagine the Naspers/Prosus executives/courtiers explain the latest transaction to their financially illiterate friends or their young children? “Bottom line is we get paid a fortune of money for looking busy.”

And how many letters of the alphabet will this group be allowed to abuse before the regulators finally step in with some corporate governance concerns?

Naspers already has ‘A’ and ‘N’ shares and now Prosus is set to create high-voting ‘B’ shares.

The sense of desperation underlying all these transactions is probably inevitable given what’s at stake – the ownership of, and income stream from, one of the most valuable companies in the world.


And it’s difficult not to imagine, given their tendency to want to control things, that courtiers within the Chinese government are on standby to protect the control position of one of that country’s most powerful businesses.


If that all sounds a little fanciful, what about the rumours swirling around that other complicated foreign-listed entity, Steinhoff?

Given that the Steinhoff supervisory board takes every opportunity available to remind us that the group is insolvent, it shouldn’t really have been a surprise that someone eventually made an urgent application for its liquidation. And yet it was.

Read: Why former Tekkie Town owners want Steinhoff liquidated

By now we’ve all had a few days to listen to the country’s best legal brains explain why this application has no chance of success; alternatively why it has every chance of success.

Both sides ignore the exhilarating – or terrifying – aspect of court actions, especially in SA, which is that almost anything can happen.

But getting back to fanciful rumours, what are the chances that the key motivation for the application made by the former owners of Tekkie Town (the applicants) is to get access to the PwC report?

Apparently these individuals remain on reasonably good terms with former Steinhoff CEO Markus Jooste who is, apparently, keen to get hold of the report in order to defend any criminal actions that might be coming his way.

It seems a stretch and it does rather overstate Jooste’s ability to manipulate people and events. Mind you, in the past three-and-a-half years Jooste’s grim reputation seems to have grown several-fold, probably because he has only once appeared in public in that time. There’s nothing like absence to generate legends.


On a more prosaic note, Sasol shareholders will no doubt be relieved to hear that the sale of 30% of the Mozambique pipeline is in line with the board’s “strategy-led divestment programme”; to many of them it might have looked like part of a desperate fire sale.

Read: Sasol sells 30% stake in Mozambique gas pipe for R5.1bn

The Sasol board has done well over the past 12 months to nudge the group back from the brink but the sale of a substantial chunk of the pipeline is puzzling, given the importance of securing that source of energy.

Shoprite and Truworths

Both Shoprite and Truworths made some interesting, and overdue, additions to their ranks of non-executive directors last week.


Could this be indication that the grip of the longest serving board members – Christo Wiese at Shoprite, Michael Mark at Truworths – is loosening a little?

Adapt IT …

So Friday May 14 has come and gone … and no sign of news about the Volaris offer for Adapt IT.

Last Friday was the extended deadline for certain conditions precedent for the completion of this transaction, which was controversial even before the Adapt IT CEO got embroiled in some shocking allegations relating to his private life.

No doubt shareholders will be informed of developments very early this week.

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Ms Crotty is right about one thing – Business and Corporate Governance has seen little improvements in Decades! It pays to read the small print…..always!
Thank you for an interesting perspective on our favorite subjects….just because one is paranoid doesn’t mean they aren’t after you! I have long suspected that much of what is represented on the JSE ( or any other stock exchange) is mostly smoke and mirrors these days….. and I’m sure I’m not alone in this!

End of comments.





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