The announcement by listed diversified logistics and transport group Imperial Holdings that group chief executive Hubert Brody is to step down in the first half of next year came as a surprise.
This stemmed not only from the fact that Brody is only 49 years old, and would have been expected to continue for many more years, but also because of the way he and his team have successfully managed Imperial’s massive restructuring and placed it on another strong growth path.
His appointment was met with scepticism by some analysts, who doubted his ability to fill the big shoes left by Bill Lynch, his predecessor who had until then led the group since its listing 19 years earlier.
However, Brody displayed a calmness in taking over the reins from Lynch at a time when the impact of the global financial crisis was starting to bite. With Imperial’s senior management team, he devised a new strategy for the group that also involved selling off some of the assets acquired under Lynch’s leadership to reduce its gearing and free up capital.
This resulted in the unbundling and separate listing of fleet management and plant hire business Eqstra; the sale of tourism business Tourvest, the aviation leasing business and a 49.9 percent interest in Imperial Bank; and the closure of its truck assembly business.
It was a bold strategy that initially resulted in unimpressive financial results and left it with three main business pillars: logistics, automotive and industrial, and financial services. Brody and his team then set about continuing with the process started by Lynch of focusing on “bolt on” acquisitions to existing businesses.
The group’s recent financial performance has been impressive and it has strong growth prospects. Brody’s decision to stand down as chief executive will create some nervousness, particularly until his successor has been announced and proven himself to the investment community. However, the group has shown it is adept at weathering storms.
We are bound to treat the investigation into allegations of wrongdoing against Philisiwe Mthethwa, the chief executive of the National Empowerment Fund (NEF), and two other employees of the organisation, with the utmost caution it deserves.
However, we cannot pretend not to have known for a long time of allegations and unhappiness about the funding decisions of the organisation.
Many people were disconcerted when the NEF decided to fund the upmarket boutique Luminance to the tune of R34 million. The shop is jointly owned by media personality Khanyi Dhlomo, her mother, Venetia, and another person.
It subsequently transpired that the application had been turned down twice by the state-supported lender’s fund management investment committee.
Such was the outcry from borrowers who had failed in their funding applications that they phoned Radio 702 about how unfairly they had been treated. They said they had not been given a second chance to strengthen their applications.
So concerned was Trade and Industry Minister Rob Davies that he called for a forensic investigation. He said he wanted to determine whether the loan was in line with the NEF’s mandate and if there was a need to strengthen that mandate.
According to the NEF, five co-operatives from KwaZulu-Natal were to receive a 5 percent ownership stake as well as potentially selling their crafts in the upmarket store. Another 5 percent was to be distributed to co-operatives in Gauteng.
However, enquiries by Sunday World in KwaZulu-Natal among the intended beneficiaries threw the deal into confusion. Many of those interviewed had not heard of the deal with Luminance.
Last week, it was reported the NEF had to write off R290m worth of non-performing loans last year. This was in addition to the lender deciding to declare a moratorium on new loans in May.
Free State DA MP David Ross has asked Energy Minister Ben Martins how Eskom, the state power monopoly, had determined the effect that the second “multi-year price determination” application would have on the economy, what that projected impact would be, and “what steps will he take to ensure that the building of six nuclear power stations will result in affordable energy for consumers”.
Martins replied that the Department of Energy had received the question, reviewed its content against its mandate and had determined that the most appropriate respondent should be the Department of Public Enterprises.
However, in response to the second question, he said: “I am aware that nuclear power is one of the most affordable forms of electricity available to South African consumers at present.”
This is despite the fact that last week at a media briefing Martins was unable to provide any costings of South Africa’s envisaged six-strong fleet of nuclear power plants. He said in the reply that “studies have shown this to be the case internationally”. He explained: “Unlike [other] power sources, nuclear power provides for a more secure pricing (less volatile) in the long term and there is much less dependence on the cost of fuel.
“The department is also conducting a study into the cost of nuclear power to provide a comprehensive update to the cost of nuclear power, bearing in mind that all energy sources have increased in price due to inflation, fuel, weakening of the rand and general demand for energy infrastructure globally.
The Department of Energy, through a government-led working group made up of Treasury and Public Enterprises, was focused on finding the “optimum nuclear financing solution that will further enhance the affordability of nuclear energy”.
That will come as a relief to the embattled energy user, should it not? If there is a working group in place, all is not lost, surely?
Edited by Peter DeIonno. With contributions from Roy Cokayne, Wiseman Khuzwayo and Donwald Pressly.