Pepkor: It looked all hunky dory ... till the skeleton rattled
Mpati commission hears evidence from former PIC employee that stake taken in Pepkor was ‘reckless’
The Pepkor annual general meeting was done and dusted in a matter of minutes on Monday, prompting chairperson Jayendra Naidoo to describe it as a “smooth” affair.
This must have been a huge relief for the board. Although now less distracted by the goings-on of its miscreant controlling shareholder, it must be constantly wary of a new headline-grabbing skeleton falling out of the Steinhoff cupboard.
But far from the Parow location of the AGM it turns out things weren’t going quite so smoothly for Pepkor, or at least for its second-largest shareholder, Lancaster 101. That’s the BEE entity Naidoo put together to acquire a 2.75% stake in Steinhoff and, in September 2017 a 9% holding in the soon-to-be-listed Steinhoff Africa Retail, subsequently renamed Pepkor.
About the same time the AGM was going along smoothly, in a room at the other end of the country – Pretoria to be precise – members of the Mpati commission were listening to evidence from yet another former employee of the Public Investment Corporation.
Paul Magula, former executive head of risk at the PIC, described the corporation’s decision to pour R9.3bn into Naidoo-led Lancaster 101 as reckless. He said the debt-funded exposure did not make commercial sense, even after the Government Employees Pension Fund took up 50% of Lancaster 101 and a community trust an additional 25%.
So, sadly it looks as if it will be some time before Pepkor will be able to enjoy the luxury of “smooth” governance, and to concentrate on making profits in an extremely tough trading environment.
The next big event on the Steinhoff calendar, apart from next week’s appearance in parliament, is Steinhoff’s AGM. It is scheduled for April and will again be held in Amsterdam; up for discussion is whether there will be a satellite link to an SA venue as there was in 2018. Remarkably, the Steinhoff team is considering not bothering with a link.