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Resilient: Murky questions remain after all-clear review



Resilient: Murky questions remain after all-clear review

Investors appear unimpressed with probe results

BusinessLIVE reporter

If only it were so easy. Resilient’s share price enjoyed something of a recovery on the expectation of the all-clear from the strangely termed “independent review” carried out, at Resilient’s request, by former auditor-general Shauket Fakie.
In the week ahead of the actual release of the review the Resilient share price jumped 30%, recovering from its 12-month low of R50 to close at R65 on the day the report was released.
After a six-week investigation Fakie’s key findings, according to Tuesday’s SENS announcement, are that there’s no evidence of executive misconduct or of any market manipulation or of any insider trading. Indeed, there was no evidence of anything untoward at all, which must be as great a relief to CEO Des de Beer as it is a surprise to his detractors.Strangely, investors did not seem overly impressed with the sparkling endorsement of the group’s upstanding nature. On Wednesday the share price crept up just 31c.
The problem is, despite the involvement of one of the country’s most respected auditors, it is going to be extremely difficult to put the Resilient “misconduct” genie back in the bottle.
Certainly the findings of the independent investigation into Resilient were weakened by its failure to interview one of the company’s major critics, 36ONE Asset Management. But over and above that there are a number of significant issues that have not yet been fully addressed.
The issue of the independence of key parties and entities including the trustees of the enormously wealthy (at one stage) education trusts has surely not been finally settled; nor has the role of two “K” companies been adequately resolved. But perhaps of greatest concern, which appears not to have been dealt with by the review, is what happens to the heavily indebted employees who borrowed from the company to buy shares at levels unlikely to be seen in the short to medium future?

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