Boardroom bust-ups

2014-10-26 15:01

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HCI: Golding vs Copelyn

The gloves are coming off as directors of Hosken Consolidated Investments (HCI) smear each other after the suspension of executive chairman Marcel Golding.

Court papers show an increasingly strained relationship between Golding, his long-term business partner Johnny Copelyn and other members of the HCI board. Golding has launched a labour court challenge against his suspension, the result of which will be known tomorrow.

HCI has controlling stakes in media companies Sabido Investments and e.tv, as well as in hotel and gaming group Tsogo Sun. The SA Clothing and Textile Workers’ Union (Sactwu) is HCI’s biggest shareholder.

The basis of Golding’s legal challenge is that holding company HCI cannot suspend him in his capacity as CEO of Sabido and e.tv because he works for them and not HCI. The judge said he would make a ruling tomorrow.

A board member who requested anonymity said the labour court challenge by Golding was a smoke screen and an elaborate conspiracy not to account for his actions.

The board member said HCI paid Golding so he is an employee. The ostensible but contested reason Golding was suspended was because he concealed the purchase 6?million of shares in electronics company, Ellies, worth R24?million, from the board.

Golding, however, said he was kicked out because he had been fighting for editorial independence at e.tv against political pressure to highlight President Jacob Zuma’s good stories in news items.

The board member said this was not true – Golding had met Cabinet ministers and had pledged to give more prominence to infrastructure.

Another board member, who also requested anonymity, said the relationship between Copelyn and Golding was severed.

“It is a great pity because the two men have built up one of the best union-owned and broad-based BEE companies in the country. It is formidable.”

Golding said he had the discretion to make investment decisions on behalf of the company with the expectation that they would be ratified. But Yunis Shaik, a director of the HCI board, said for Golding to believe this conduct was acceptable was misleading.

In his replying affidavit, Golding attacked Shaik’s credibility and included SMSes he had sent to him as back-up as the executives continued airing each other’s dirty laundry.

Golding said Shaik wanted what he had so he no longer had to live a life of difficulty.

“As he put in his SMS to me when e.tv listed: ‘Think of this say like this: at the time of the e.tv licence being granted I was with Schabir at Nkobi trying to build our company. Today you listed e.tv and raised R640m. Today Schabir [Schabir Shaik, his brother] is convicted. Today I signed bond for R3.5m to buy a house. When you see life through my eyes, you will understand why I celebrate your success. I work for a living sucking d***[word deleted]. I go to borrow from a bank R3.5m you went to the market and raised R640m. You get it? You living the dream. Me and the rest of us live the hell we call life. Celebrate this moment celebrate your life. You did, the rest of us failed,’” Golding quoted Shaik in his affidavit.

Golding also revealed an instance in which he said Shaik was not above the use of unorthodox methods to achieve his goals, saying this had led to conflict.

“In a text message at 12.12h on 18 May 2014, for example, Shaik wrote to me: ‘There is a guy in dbn is the provincial equivalent of a DG of a Dept: Economic Planning. I need this guy to help with licence for Niveus in kzn. Can we invite him to the World Cup.’

“Niveus is a company within the HCI holding group. I felt it most inappropriate to offer such incentives to government officials, no matter in what capacity, and conveyed this to Shaik.”

Golding also called for Shaik to reveal to the court a letter received by HCI from shareholder Remgro setting out its view on the matter and threatening possible legal action against HCI.

PPC: Gordhan vs Sibiya

A few of PPC’s minority shareholders were not deterred by the company’s rejection of their bid to call a special meeting of shareholders and continued to buy more shares on the market to bring their shareholding to the volume required to call another meeting.

On Monday the board, led by executive chairman Bheki Sibiya, rejected a request for a special meeting from two fund managers – believed to be Foord Asset Management and Visio Capital Management – after a third fund manager pulled out.

Without the support of the third, the shareholders did not have the 10% of the shares needed to call the meeting.

But Bloomberg reported that Foord subsequently raised its stake in the company and would ask for another meeting.

Azola Lowan, PPC’s investor relations and strategy executive, was tight-lipped on plans for this meeting. He said the company was engaging with shareholders and would soon make an announcement.

Foord’s Carolyn Levin declined to comment.

The special meeting will support ousted CEO Ketso Gordhan’s bid to return to the company. He resigned after a fallout with the board, which was headed by Sibiya, last month when it would not let him get rid of another executive he claimed was obstructing his strategy.

Gordhan had previously canvassed shareholders about his reinstatement.

The fund managers want to replace Sibiya’s board with a new one that will include Gordhan, along with four existing directors.

PPC claimed that the four directors said they were not approached by the fund managers for nomination, and were not available for re-election.

It added that the entire board had accepted Gordhan’s resignation and, as there had been a breakdown in trust between the two parties, forcing the four to work with him would not be in the interests of shareholders nor would it make for an effective board.

Asked if he would have been able to work with them, Gordhan told City Press he was in the dark about the names of the directors as the matter was between shareholders and the company.

“I think it is appropriate and necessary for shareholders to act to protect their interests, and I support what they are doing,” he said.

Another executive at the cement producer quit this week, saying he did not want to be associated with the saga.

Richard Tomes, joint MD of PPC Cement SA, resigned on Thursday.

“I felt that the time was right to make a clean break as I did not want to be associated with what is happening in PPC at the moment,” he told City Press.

“I’m sure things at PPC will stabilise and [the] company will continue to do well in future, and I wish them well.”

Despite the boardroom tussles, PPC said it would continue with its search for a new chief executive.

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