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Enrichment … and disenchantment

MultiChoice shareholders don’t seem very happy (though its directors must be), a ‘black sheep’ enters the fray at Adapt IT, and more sad news for Spur Corporation.
Dubai is home to MultiChoice chair Imtiaz Patel, even though the company has no operations there. Image: Moneyweb

The MultiChoice board must often wish it had inherited the characteristics of the Naspers control situation when it was hived off the Naspers mothership a few years ago. But it didn’t. So it has to be a little more engaged when dealing with irritating things such as shareholders voting in large numbers against resolutions put to annual general meetings.

Judging by the results of the AGM held last week MultiChoice shareholders aren’t a happy bunch.

For starters, Jim Volkwyn’s re-election was opposed by a hefty 34% of shareholders, which seems a bit harsh. Perhaps shareholders are unhappy about Volkwyn’s tag as lead independent director; it certainly is a rather imaginative one given that he has been on the MultiChoice SA board since 2007 and for a long time before that served as CEO of Naspers’s global video-entertainment platforms. And then there’s the matter of the consulting arrangement he has with the company for which he got R3 million last year.

Perhaps being so steeped in the entertainment business presents challenges for this group when it comes to defining reality.

In MultiChoice’s case the need for an evidently ‘independent’ person to be lead independent director is more important than usual, given that Imtiaz Patel is the group non-executive chair. Patel has a long history with MultiChoice, including a stint as CEO; he has eschewed the ‘independent’ tag but the issue of whether or not he is ‘executive’ is clouded by the existence of a R3 million service-level agreement with MultiChoice.

Francis Letele is also tagged non-executive although he received a R3 million fee from the group.

Kgomotso Moroka, who was paid a fee of R2 million, is described as independent and non-executive. Apparently Moroka is so rich that the board considered the R2 million immaterial and “after consideration on a balanced and substance-over-form basis, determined that the agreement does not affect her categorisation as an independent non-executive director”. This of course prompts speculation as to whether R2.5 million might have tipped the measure of materiality or would it have needed R5 million.

Almost 30% of shareholders voted against the reappointment of PwC as the ‘independent’ external auditor.

Presumably MultiChoice inherited PwC from Naspers, where it has been auditor for all 106 years of Naspers’ life.

Perhaps the MultiChoice board believes the measurement of ‘independence’ only began when MultiChoice was separately listed in 2019? Or in the year when that move was initiated.

Then there’s the remuneration policy …

Given all the special fees washing around the boardroom it was probably not surprising that 64% of shareholders voted against both the group’s remuneration policy and the implementation report.

And it’s likely shareholders are also irritated, or at the very least puzzled, by the need for the chair and CEO to be based in Dubai.

Although Dubai is home to the International Cricket Council and offers opportunities for attractive personal tax management, MultiChoice has absolutely no operations there. A number of shareholders have expressed concerns about the location adding to the group’s cost base. Surely somewhere in Africa would be closer to MultiChoice’s ‘rest of Africa’ operations than Dubai?

And then there’s the assault from the Nigerian tax authorities. If the MultiChoice board can’t demonstrate there is no substance to the regulator’s ‘shake-down’ then next year’s AGM could look even more hostile.

On a sort of related matter, Emilie Choi’s unexpected departure from the Naspers board will be a loss, given that she was one of the few truly independent directors on that board.

Adapt IT

And on a totally unrelated matter, Adapt IT released an interesting Sens announcement early last week. It appears that a little-known entity called Blacksheep Master Fund, which is based in Dublin, has acquired a 15.9% stake in the company.

There were no details of the price paid but the share has traded in a narrow band between 6.65c and 6.8c for the past few weeks.

Last month Canadian-based Volaris said it would extend its R7 a share offer for Adapt IT from end-July to end-September.

If Blacksheep is not related to Volaris there could be another excitement-filled chapter in this story before it ends.

Read: Sbu Shabalala quits Adapt IT after assault claims

Spur

Spur Corporation has just recorded the loss of its second executive director in 2021. Fortunately the most recent exit has not been caused by Covid-19, which was responsible for the loss of group human resources director Graeme Kiewitz in January.

Last week the restaurant group announced that chief marketing officer Sacha du Plessis has resigned with effect from September 15 “to pursue other business interests”.

It’s been a sad year for Spur; in May Pierre van Tonder, who had played a key role in growing this great business, died.

Hopefully the rest of their year will be more peaceful.

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