Parade of departing execs will fuel shareholder jitters
Fourth top executive to leave GPI in the past year comes amid calls for more effort to unlock value
The boardroom at empowerment group Grand Parade Investments (GPI) is looking alarmingly short of executives.
On Friday afternoon the company – which holds the Burger King master franchise agreement for Southern Africa as well as valuable gaming assets – announced the resignation of CFO Shaun Barends with effect from the end of June.
Barends is the fourth top executive to depart GPI in the past year.
Shares in GPI finished stronger, though, closing up almost 5% at 236c. But there has been an increasingly audible clamouring from shareholders around pushing GPI’s executives for a more concerted effort to unlock value.
The company, which also holds an influential stake in restaurant franchisor Spur Corporation, reported a 693c/share intrinsic net asset value (NAV) at the end of 2017.A terse statement on SENS noted that Barends, who was only appointed as CFO in July last year, would be exploring other business interests.
GPI said proceedings to appoint a successor were under way and details would be announced in due course.
Barend’s resignation follows hard on the heels of Tasneem Karriem resigning in early April as CEO of GPI with immediate effect. No reasons were given for Karriem’s sudden departure. She was appointed an executive director of GPI in September 2016 but was only appointed CEO in July last year.
Karriem succeeded Alan Keet, who endured a few years in the role of CEO before being put in charge of the GPI’s food division in March 2016. But Keet was subsequently replaced in mid-2017 by GPI stalwart and former FD Dylan Pienaar, who lasted only a few months at the head of the food portfolio before resigning in November last year.The imminent departure of Barends will leave GPI prime mover, major shareholder and long-serving executive Hassen Adams as the only executive director on the board. Hassen, the executive chairperson of GPI, is already serving as acting CEO.
Anthony Clark, a small-company analyst at Vunani Securities, said the board changes would fuel questions around what was transpiring at GPI, which was trading at a 52% discount to its conservatively stated net asset value.
“To lose a CEO is unfortunate. But to lose a CFO so soon after the departure of the CEO is highly irregular.”Clark said shareholders would wonder whether the recent executive departures were linked to efforts to transform GPI and narrow the discount the shares offered on the underlying value in the investment portfolio.
“Will large shareholders put up with these shenanigans? Surely they will band together to engender change and push to unlock value?”
Some of the bigger institutional shareholders in GPI include Foord Asset Management and Investec Asset Management.
While GPI’s “operational thrust” is mainly in rolling out Burger King outlets to meet a target of 80 stores by the end of June, the company holds valuable minority stakes in gaming assets such as the GrandWest casino in Cape Town, the Golden Valley casino in Worcester and a limited-payout machine business.
In terms of unlocking value, GPI recently suffered a setback when the sale of its head-office building at 33 Heerengracht in Cape Town for R225-million fell through.