Cape Town - Desmond Lockey would rather run a R1.2 billion company than a company worth R100 million, it emerged yesterday.
Lockey was the chief executive of Arch Equity before the investment holding group's merger with PSG Group, the Stellenbosch-based financial services investment company.
Lockey was speaking yesterday, three weeks after the Cape high court gave the green light for the merger of the two companies to go ahead.
A day after the court order, Lockey resigned as chief executive of Arch Equity and as a non-executive director of PSG.
Lockey said he had sold Arch Equity, a R1.2 billion public company with 600 shareholders. What remained of the company was a very small portion containing black economic empowerment deals. The company has since delisted from the JSE's AltX exchange.
"I did not feel like leaving as the chief executive of a listed company and run a company that's worth maybe R100 million. I can use my experience and my time a lot better," Lockey said with a chuckle.
He said he was taking time off and was considering various offers, adding that the merger was an amicable deal supported by 99.9 percent of the shareholders.
"If you run an outfit that's worth R1.2 billion and the next time you get an opportunity to run something that's R100 million there's a limit to how low you can go.''
Jannie Mouton, the chief executive of PSG and of the newly merged entity, said the merger between PSG and Arch Equity had been approved by the Cape high court in a scheme of arrangement in terms of section 311 of the Companies Act.
Before the approval there had been all sorts of financial arrangements in place and Lockey received 2.9 million PSG shares valued at R20 a share. There were no restrictions placed on Lockey on what he could do with his shares.
An observer with a close knowledge of both businesses, who declined to be identified, said Lockey's resignation should be seen in the light of PSG swallowing up Arch Equity. This would result in Lockey going into the merged entity's management and no longer being "a rooster in his own yard". His unhappiness over this was a contributory factor, the source said.
"Another factor is that in general, in black economic empowerment deals, as soon as the guys make a lot of money, they want to pocket it. Desmond made a lot of money, which is locked up in shares that have value. It's nice to have this in your bank account."
There was, however, no bad blood between Lockey and Mouton because they held each other in high regard.
Lockey had been heard remarking recently that he felt burnt out and wanted to take a sabbatical, the source said.