The Institute of Directors of Southern Africa (Iodsa) this week issued to its members Telkom’s invitation for applications to fill the vacancies of non-executive director positions on its board.
These are positions that could have been filled two weeks ago at Telkom’s annual general meeting, had it not been for the government-led drama that culminated in the ousting of four directors.
It is appreciated that as a majority shareholder, the government owns the right to vote as it wishes and the subsequent resignations of a director and company chief executive last Friday add a sense of urgency to the matter. Telkom can only recruit a chief executive once it has filled six director vacancies.
In light of the upheaval at the fixed-line service provider, there may be fewer willing hands to tackle this challenge, especially from the institute.
Iodsa represents professionals, business owners and leaders, and espouses the values of ubuntu, integrity, professionalism, efficiency and adding value and innovation, according to its website.
Its motto reads: Better directors, better boards, better business.
It was established in 1960 by Harry Oppenheimer as a chapter of the London Institute of Directors.
In 2001 the outspoken Reuel Khoza was elected as only the third Iodsa president in 50 years.Vice-president is the godfather of corporate governance, Mervyn King.
Perhaps by canvassing Iodsa members it could be a sign that Telkom is stepping in the right direction to repair its corporate image.
Deon Liebenberg, a well-known and talented figure in the telecoms industry, has resigned as managing director of Telkom Business Mobile after joining the unit in July. Only time will tell how much longer others, such as chief financial officer Jacques Schindehutte, can endure. This week he told Business Report rumours that he was leaving Telkom were incorrect. page 5
Tourism
The weakness of the rand against the British pound, euro and dollar is good news for hotels in this country as the tourism season starts.
Five-star hotels, most of which have struggled for the past two years, are filling up with people who normally stay in much cheaper accommodation and have suddenly found that the exchange rate enables them to afford the best.
According to Joop Demes, the managing director of Pam Golding Hospitality, this situation is also benefiting three- and four-star hotels, but is hitting the budget hotels which are being left out in the cold by younger tourists in particular, who tend to book online and look for the best available rates. It can also bring visitors who had thought they could not afford to come here at all until they realise how the drop in the value of the rand has brought a holiday in our summer during their winter within their reach.
Danny Bryer, Protea Hotels’ director for sales, marketing and revenue, agreed that, for people in Europe, realising that prices in rand meant a saving of 10 percent to 15 percent compared with last year, would mean many last-minute decisions.
Fortunately, British Airways has doubled its flights to Cape Town – our most popular holiday destination – to two a day for the summer season. Virgin Atlantic Airways, Lufthansa, Air France and Swiss airline Edelweiss have returned to the city with their seasonal flights and Condor, owned by tour company Thomas Cook, is flying to the city for the first time, which will help to compensate for SAA’s decision to fly to the UK and continental Europe only from Johannesburg.
According to Bryer, there will be no rooms to be had in the Christmas to New Year period, but apart from that, some can always be found.
Burger King
It appears unlikely that there will be floods of foreign direct investment flowing from the joint venture agreement between Florida-headquartered but largely Brazilian financed Burger King Worldwide and the Cape Town-headquartered Grand Parade Investments (GPI) – which has 1 800 limited payout slot machine operations in Gauteng, KwaZulu-Natal and the Western Cape, as well as sizeable stakes in the GrandWest and Golden Valley Casinos.
They are expected to roll out hundreds of outlets.
36One Asset Management analyst Jean Pierre Verster said the announcement showed “the quick service market” was still optimistic about business in South Africa, following on the heels of Cyril Ramaphosa’s deal last year to manage 145 McDonald’s restaurants across the country for 20 years. Ramaphosa’s investment is still not known, but it is believed to be R1 billion.
The partnership with GPI would give it some “quick wins” regarding business retail space, said Verster. It would also give Burger King the benefit of the GPI war chest, believed to be R700 million.
Verster said the ownership of Burger King had not been particularly stable and its investment in South Africa with GPI probably implied “that they would not put up most of the capital”. The New York Times reported that it had 13 chief executives in 25 years, numerous strategy shifts and marketing campaigns, and had been constantly starved of cash. Bloomberg said the food franchise chain – which was second only to McDonald’s in the US – had suffered slowed growth in the last few years.
That doesn’t mean money hasn’t been made out of the business. In 2002 Goldman Sachs, with two private equity firms TGP and Bain Capital, bought Burger King for $1.5bn (R12.9bn). In 2010 they sold it to 3G Capital – a New York investment firm backed by Brazilian investors – for a tidy sum of $3.3bn, Bloomberg reported. It was believed to be the biggest restaurant acquisition in a decade.
It seems, like the New York Times put it, that the private equity guys got their cash. Isn’t that what really matters
?
Edited by Peter DeIonno. With contributions from Asha Speckman, Audrey D’Angelo and Donwald Pressly.