Dineo Faku and Bloomberg
THE SURPRISE suspension of Marcel Golding, executive chairman at Hosken Consolidated Investments (HCI), on Wednesday is the end of an era for the black empowerment investment company which he helped start, said Theo Botha, a shareholder activist, yesterday.
The company, valued at R18 billion, dropped by almost 2 percent on the JSE yesterday amid reports that Golding was suspended over buying R24 million shares in Ellies allegedly without authorisation, Bloomberg said, quoting Labour Court documents. The share closed up 0.09 percent at R153.04 yesterday.
Golding’s decision to invest in the TV equipment company on behalf of HCI media unit Sabido Investments was done “without the necessary authority and mandate of the board”, according to an attachment on a Wednesday labour court application from Golding, in which he sought to overturn his suspension. “I contend that I acted in good faith in what I at the time believed to be the third respondent’s best interests in purchasing the shares,” he said, referring to Sabido.
HCI is a major shareholder in Tsogo Sun Holdings, which owns and operates hotels and casinos. Its subsidiary, free-to-air TV firm Sabido Investments, owns a 61 percent stake in e-tv, South Africa’s 24-hour news TV channel and a 100 percent stake in Cape Town-based Golden Arrow Bus Service.
Botha said Golding and the chief executive John Copeland worked hard to build the HCI empire, and “now it is seems that their relationship is coming to an end. The suspension will have a huge implication on HCI and its subsidiaries because Golding sits on a number of boards related to HCI.”
Jean Pierre Verster, an analyst with 36ONE Asset Management, said the allegations of misconduct seems to have been admitted by Golding in court papers on the expectation of ratification of his actions by the HCI board of directors, in keeping with past practice.
Yesterday, HCI said the allegations would not have a dent on the company’s financial performance. “Shareholders are further informed that the nature of the alleged misconduct by Mr Golding, whilst serious in nature, is unlikely to adversely affect the performance of the company, or materially affect its financial performance,” it said.
HCI suspended Golding on Wednesday, pending a disciplinary inquiry into allegations of misconduct. It said disciplinary proceedings had been instituted and the process is scheduled to begin on Monday. Golding had taken legal action to lift the suspension and block the hearing, according to the company statement.
“While HCI respects the right of its employees to take whatever legal steps they deem appropriate in their own defence, HCI will take such steps as are necessary to protect its interests,” it said.