Money never sleeps

2015-03-04 14:00

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Money makes money without breaking a sweat. Moyagabo Maake does the maths on two tycoons’ fortunes to see how they grow

South Africa’s superrich have put considerable distance between themselves and a life of poverty.

Even though some, such as mining magnate Patrice Motsepe and luxury goods tycoon Johann Rupert, give chunks of their earnings to charity, it is like chopping off a Hydra’s head – a few more will sprout back, because money never sleeps.

Rupert, whose family fortune is valued at about R83.5?billion by business magazine Forbes, donates his salary to charity. But he was on sabbatical from Richemont during its 2014 financial year, so did not earn a salary that year from the company that makes Cartier watches and Montblanc pens. He also does not get paid a salary for his work at investment companies Reinet and Remgro, which he also chairs.

But his listed shares in all three companies were worth nearly R16.7?billion as at February 24, making him one of South Africa’s wealthiest men.

The value of his unlisted shares in Remgro and Richemont, which control most of the voting rights in the company, is not known. Over the three years and nearly two months to February 24, they appreciated R1.5?billion in value on the Swiss, Luxembourg and Johannesburg securities exchanges, where they are traded – equating to an income of R1.3?million a day.

Rupert is an avid golfer and developed the Leopard Creek golf club in Mpumalanga with former professional golfer Gary Player.

While playing one round – or 18 holes – of golf, which would take an estimated four hours, Rupert’s shares would still be working for him, making him R222?368 during that time. That is R55?592 an hour, more than the R2?800 median salary the average South African earns in a month.

In the 2013 financial year, Motsepe – whose public equity holdings have earned him the title of the country’s richest black man – banked R13.6?million in salary and bonuses from his job as executive chairperson of African Rainbow Minerals.

He received another R21?million from 133?784 share options. This is small change compared with his shares in the company, along with those in Sanlam, collectively worth about R17.12?billion.

Take the R34.6?million he earned from African Rainbow Minerals and the average gain of R4.8?billion his shares made over the year to December 1 2014, and Motsepe makes more than R13?million every single day.

He won’t have had to break a sweat for the interest; it earns itself. Assuming he did not touch the R34.6?million he earned from African Rainbow and instead placed it in an Investec private bank account – which has an interest rate of 4.25% for amounts above R5?million – Motsepe would make almost R1.5?million in interest alone. This works out to R4?028.78 in interest a day.

Lump this in with the returns he gained from his stake in Sanlam, where he serves as deputy chairperson, and his money really is working for him.

Motsepe’s 226 million shares in Sanlam, which were worth R16?billion by December 1, gained him the equivalent of R581?250 in the 90 minutes his prized football team, Mamelodi Sundowns would take to play a match.

The share has gained an average of R14.99 each year for the past three years, translating into gains of R9.3?million a day – that’s R6?458.33 a minute.

This more than makes up for the beating his shares in African Rainbow have taken over the past three years.

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