As Steinhoff creeps toward the still distant finish line, it’s hard not to feel some respect for the tenacious executives who have spent much of the past four years in the corporate equivalent of hand-to-hand warfare with a variety of investors. aggrieved. .
Of course, it helps that all that stubborn work is extremely well paid. It means that executives win whatever happens. Not so the shareholders for whom ‘winning’ only means losing a little less.
Of course, the biggest winners from all of this will be financial creditors who took out Steinhoff loans at a fraction of their face value after the December 2017 announcement of accounting irregularities at the company. Not only are they ready to get 100 cents in the rand when things finally work out, but in the meantime, they enjoy 10% interest every year. This extremely generous interest payment is in addition to the initial € 9 billion, which presumably means that the loan now exceeds € 11 billion.
As things stand, it appears that the biggest threat to the completion of the Section 155 settlement scheme is the liquidation request filed by the founders of Tekkie Town led by Braam van Huyssteen and Bernard Mostert.
While it seems unlikely that they will manage to divert things, they could certainly delay resolution. Van Huyssteen and his co-founders have announced that they oppose the request that the South African court sanction the crucial Section 155 settlement scheme. However, given that the scheme was supported by 100% of creditors, it is difficult to see how the court would not approve.
It is also difficult to imagine the Constitutional Court getting involved in the matter.
Steinhoff has apparently approached our superior court in an attempt to postpone the Western Cape Court hearing on Van Huyssteen’s application for liquidation. A swift and favorable (for Steinhoff) ruling from the Constitutional Court would ensure high court approval of the Section 155 scheme. Such approval would remove any legal threat from Steinhoff’s creditors.
The risk for Steinhoff is that if the liquidation request is successful, the liquidator gains control of the company and will retain that control even if Steinhoff appeals the liquidation resolution.
Steinhoff is likely to be particularly interested in ensuring that the infamous PwC report is not released during a possible liquidation process; such a revelation would provoke all kinds of antagonisms and legal actions.
However, although white collar crimes are a serious challenge for the country, they may not be considered of sufficient constitutional interest to justify urgent intervention by the Constitutional Court.
Listen to Moneyweb editor Ryk van Niekerk’s interview with Christo Wiese below (in Afrikaans) or read the English transcript here.
On a more prosaic note and just to show that the wheels of justice and regulation are working slowly, earlier this month, the Business and Intellectual Property Commission (CIPC) won a legal action against JCI Limited.
JCI may have been forgotten by most investors, but in its day, well, particularly since the mid-1990s, when it was the subject of an Anglo American split / BEE exercise, it was almost as controversial as Steinhoff.
It appears that the ICPC inspectors found that for the period 2011-2017 JCI had not compiled audited financial statements as required by the Companies Act.
After initially seeking to have the ICPC compliance notice revoked, JCI admitted that it could not prepare the financial statements as required by the Companies Act.
In terms of a settlement agreement reached with the CIPC, JCI must now pay an administrative fine of R1 million and convene a shareholders’ meeting to adopt a special resolution for the voluntary dissolution of JCI Limited.
African capital of the rainbow
Speaking of BEE, it seems that Patrice Motsepe, Johan van Zyl and Johan van der Merwe are the main BEE moguls of the early 21st.S t Century.
The key players behind African Rainbow Capital (ARC) seem to be able to absorb any offer that strikes them.
It’s quite surprising that thanks in large part to ARC’s acquisition of a stake in Sanlam Investments last year, the number of assets managed by black-owned fund managers has nearly doubled. In June 2021, black-owned businesses managed R1.15 trillion, up from R667.8 billion the previous year. Sanlam Investments accounted for R344 billion of the increase.
Read: Questioning Rain’s Assessment
Meanwhile, Sasol’s determination not to take a “big bang” approach to carbon emissions will not win him friends in the community of environmental activists.
The company, which is South Africa’s second largest greenhouse gas emitter, has tripled its “aspiration to reduce emissions by 2030” and is putting plans in place to transform the group by 2050.
Tripling aspirations sounds quite exhausting and also remarkably vague.
Perhaps all executive bonuses should be suspended until these aspirations have a tangible appearance in the way Sasol operates.
Read: Sasol charts his future