Behind last week’s brief anodyne notice about the pending delisting of Hosken Consolidated Investments (HCI) subsidiary Niveus lies a heated court battle between former corporate colleagues as well as details about the fate of one of the country’s most valuable art collections.
Four years after he attempted to block an appraisal bid by KWV shareholder Albie Cilliers, former KWV CEO Andre van der Veen launched his own appraisal bid to secure fair value for almost four million Niveus shares that he owns.
The legal action was triggered by HCI’s proposed buyout of the 47% minority shareholders in Niveus at 240c a share.
Ironically the latest legal battle involved a rehash of many of the issues raised in the long-drawn-out battle between Cilliers and Niveus, which was the major shareholder in KWV.
The earlier KWV battle was sparked by the sale of that company’s liquor brands, which left it with valuable properties, art and cash, and saw it being renamed La Concorde.
Van der Veen tells the court he was CEO of Niveus from September 2012 to October 2017 and states that as a former CEO he has an intimate knowledge of the company and its asset base. He does not specify a value but indicates it should be at least 328c a share.
Offer price ‘substantially below’ full value
Van der Veen argued the September 2019 offer price for his Niveus shares was substantially below their full value and called on the court to review the terms of the transaction.
He contends that among the assets not fully taken into account in the 240c offer are the valuable properties and the famous art collection owned by La Concorde.
Van der Veen’s court papers, which were lodged with the Cape High Court on December 19, 2019, reveal that the art collection is no longer stored in La Concorde’s historic offices in Paarl, where the public had access to it.
He says the most valuable, and largest, piece of that collection – Irma Stern’s ‘Harvest’ – has already been moved to HCI’s head office in Sea Point.
“It is unclear under what circumstances [it was moved]. The painting was previously stored in the KWV Sensorium in Paarl, a purpose-built art exhibition space with humidity controls, fire and theft alarms … moving it to the HCI head office in [Sea Point] was difficult, as a crane had to be hired to install the painting there,” said Van der Veen in his affidavit.
Irma Stern ‘moved’
A shareholder who attended the scheme meeting at HCI’s offices on December 4 said the Stern painting was hanging in reception when he arrived. “However, curiously, when the meeting adjourned some 45 minutes later, the painting had been moved and was no longer hanging in the reception.”
Former trade unionist Johnny Copelyn, who is CEO of HCI, confirmed to Moneyweb that the art collection is no longer stored in Paarl. Copelyn said the historic Paarl building is now simply a rented office block with about 60 tenants. He said the building is not visited by the public.
“Even the AGMs of La Concorde shareholders have moved to being held at the offices of HCI for the last couple of years,” said Copelyn, explaining that the Stern painting is once again hanging in the reception of the offices of the company that owns it (HCI/La Concorde).
It is unclear whether any of the art is now accessible to the public.
Copelyn confirmed that HCI now owns around 90% of the La Concorde shares through Niveus.
Although the art work does not represent the greatest part of La Concorde’s value, for years it has been the subject of considerable shareholder discussion.
Much of the proceedings at the AGM in 2017 (held in Paarl) concerned the fate of the collection. According to media reports at the time, Copelyn (who was chair of La Concorde) discounted the chances of the art collection being sold off, arguing there was a duty to protect important SA art. He stressed there was a duty to deal with the art collection responsibly. “Should we donate the collection to the National Gallery? Is that a bad outcome … having the art viewed by the public?” said Copeyln at the 2017 AGM.
Until the end of April it was unclear whether Van der Veen would get the necessary court approval to pursue his bid to have the 240c offer reviewed. But in a ruling on April 28, Acting Judge Sievers granted leave to apply to court for a review of the special resolution needed to implement the offer.
This decision, which could have significantly delayed or even blocked the planned delisting of Niveus, appears to have prompted settlement discussions between Van der Veen and HCI.
Last week Niveus issued a Sens announcement informing shareholders that the legal action (by an unnamed party) has been withdrawn, that the scheme is now unconditional and that Niveus’s listing is scheduled to terminate on May 26.
In his judgment Sievers says the voting at the shareholders’ meeting on December 4 was clearly tainted by Niveus’s inadequate disclosure. Given this poor disclosure and Van der Veen’s allegations that the company blocked interrogation of the true market value because it knew the offer was below that value, the judge ordered that the parties could apply for a court review of the special resolution.