File image: Christo Wiese was appointed interim executive chairperson of Steinhoff Holdings.Photo: Bloomberg.
File image: Christo Wiese was appointed interim executive chairperson of Steinhoff Holdings.Photo: Bloomberg.

TIMELINE: Top 20 stories for 2017 on Business Report

By Staff Reporter Time of article published Dec 20, 2017

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CAPE TOWN -  2017 has been filled with breaking stories, from company scandals to rand downgrades and cabinet reshuffles in Parliament. 

We take a look at the top Business Report stories this year that has made the cut onto the top 20 list. 

1. Nobody approached me to replace Matjila at PIC: Molefe

In September this year, there was talk of former Eskom CEO, Brian Molefe to replace current CEO, Dan Matjila. 

This followed a plan earlier in the month to oust Matjila. 

It was rumoured that the attempt to make changes at the PIC was driven by controversial Gupta family who were eyeing the investment arm's billions. 

At the centre of the attempts of Matjila’s removal, was the allegations that he issued millions of rands to help fund a business that belongs to his girlfriend.

Molefe has alluded to the fact there may be elements at play with rumours of his possible appointment at the PIC being linked to the fact that the ANC is headed for its elective conference at the end of the year.

2. Ratings agency downgrades credit rating to junk

Ratings agency, Moody’s Investor Service hit out at embattled Steinhoff in early December. Its board and slashed the group’s credit rating by four notches to junk.  The group’s ratings were also put under review for further downgrade.

“Should further details of the accounting irregularities put additional pressure on Steinhoff’s financial condition, this could lead to further downward pressure on the ratings,” Moody’s said.

”It appears that investors, in general, have lost faith in the executive and non-executive directors of Steinhoff. In general directors of listed companies in South Africa have been exposed as being poor in their fiduciary responsibilities”, said the chief investment officer at Aeon Investment management, Asief Mohamed.

3. The rand may take a 5% dive following a downgrade

In the build up to the credit rating from ratings agency Moody’s in Novermeber, economists warned that the rand may plummet following a downgrade. 

In August, Moody’s refused to release a ratings review on South Africa. The ratings agency later blew steam on August 17 by warning that continued bailouts of state-owned companies (SOEs) could threaten the country’s future credit outlook.

"We expect a Moody’s downgrade to Ba1 on the foreign (and so local) currency front on 24th November. S&P is yet to give commentary post the MTBPS, but the risk is that it joins Moody’s on the 24th", said Chief Economist at Investec, Annabel Bishop. 

"The rand could move by about 5%”, added Bishop. 

Meanwhile, Finance Minister Malusi Gigaba went out on a limb to ensure that South Africa does not receive its fourth junk status from S&P since the inception of democracy. 

Gigaba reportedly met with S&P to reassure international ratings agencies.

4. Suspended Eskom CFO to face grilling over Gupta links at parliamentary inquiry

Suspended Eskom Chief financial officer Anoj Singh was set to appear before the parliamentary inquiry, in early December, regarding illicit dealings at the power utility. 

In August, Eskom was forced to contradict Singh's assurances that there were no unauthorised payments to the Gupta family's Trillian Capital Holdings and to KPMG. 

The climbdown came after New York-based consultancy Oliver Wyman denied that on review it found the payments, totalling R1.6 billion, to be above board, and said it had suggested these be subjected to legal review.

He is said to have been central to arranging a R1.6 billion guarantee and R657 million prepayment to help the Guptas's Tegeta Exploration buy the Optimum coal mine.

He was placed on special leave following pressure from Eskom's lenders.

5. GALLERY: Premier Fishing satisfies their 2017 financial result's appetite

African Equity Empowerment Investment's subsidiary, Premier Fishing and Brands Limited released their audited financial results for the year ended August 31, 2017. The distinguished food and fishing group revealed new acquisitions as well as overall company growth.

The vertically integrated fishing group has ticked all the right boxes during their 2017 financial year. A meagre 8 months after listing on the JSE, the Premier Foods announced that its year on year profit after tax increased by 31% from R52 million to R68 million. 

"I am pleased at the results for this financial year and I wish to congratulate the Premier team on the efficiency as well as maintaining their focus on growth, development and sustainability. The growth plans for the fishing Group is taking place in earnest as expected and we look forward to the output and growth that this will generate in the future", said Group CEO of majority shareholder, African Equity Empowerment Investments Limited (AEEI) and Deputy Chairman of Premier, Khalid Abdulla.

Premier purchased a majority stake between (50-54%) in the largest squid player in the South African market, Talhado Fishing Enterprises. 

6. Sagarmatha Technologies introduces us to 'Silicon Africa'

Information and communications technology company, Sagarmatha Technologies, under the leadership of investor guru Paul Lamontagne, was the first company to present a sharp vision of world-class technology platforms for Africans.

Lamontagne was appointed as the chief executive of Sagarmatha Technologies, an integrated multinational technology platform group, in October with ambitions to open offices on the continent in three other regions over the next twelve to twenty months.

“Africa is the next global growth story and technology is the enabler for the African economic growth in the next century. The time is now to invest in Africa, the continent needs a company like Sagarmatha, offering a fully integrated value proposition for consumer and business audiences,” Lamontagne said in an exclusive interview with Business Report (BR).

Africa will have the largest young population in the world in absolute terms; by 2035 Africa will have more than half of the world’s under-35 working age population.

Sagarmatha successfully pioneered and partnered with associate and group companies to develop propriety software technologies, maximising the platform effect and enabling the group to optimise the opportunities presented through the Fourth Industrial Revolution, especially in emerging markets with a special focus on Africa.

7. Naspers, rand lead the bourse lower

Multinational media group, Naspers shares headed on a downward slope in early December. 

This month, the company saw a drop in the Naspers’ share price and a stronger rand impacted on the all share index on the JSE as it lost its upward momentum.

Just after the close of the JSE on Friday, the Dow had broken through the 24300 points level. This sharp increase was mostly down to investors welcoming the signs that the odds were improving for the Republican-led effort to forge a sweeping tax overhaul bill.

Due to this strong drop in Naspers, as well as the stronger rand, the all share index on the JSE ended last week 1.4percent lower at 59449.38 points.

8. Wiese resigns as Steinhoff chairman in wake of accounting scandal

South African tycoon Christo Wiese resigned on December 14, as chairman of Steinhoff (SNHG.DE) as the company faced an accounting scandal. 

Steinhoff said Wiese, its top shareholder and chairman who stood in as chief executive had offered to step down to reinforce independent governance and address any possible conflict of interest.

Wiese has been chairman since last year and a board member since 2013. He owns about 22 percent of the company, the stake he built in 2014 when he sold his clothing retailer Pepkor to Steinhoff via a combination of cash and shares.

Steinhoff named Heather Sonn, a member of the supervisory board and its independent sub-committee, as acting chairperson, and said Wiese’s son Jacob had also resigned from the board.

9. KPMG ends week of hell

Embattled auditing firm, KPMG ended a torrid year with another slap on the face after JSE-listed AVI cut ties with the firm after 17 years. 

Adding to the blow,  the South African Reserve Bank (Sarb) also said the country’s banks reserved the right to review their relationships with the beleaguered firm as that would undermine financial stability in the market. 

The firm’s senior executives then battled to convince MP that it had taken concrete steps to clean its house -  admitting that it was fighting for its survival and that it had opted to pay handshakes to executives implicated in the fallout.

In another blow to the profession, auditor-general Kimi Makwetu also raised questions on the quality of SizweNtsalubaGobodo (SNG)’s work after it initially gave Denel, the controversy-prone state-owned arms manufacturer a clean audit, despite lack of supporting evidence. 

10. EOH recovers after rocky week's trade

Technology firm, EOH share price recovered, following a volatile period for the stock. This came after reports that the Hawks were investigating businessman Keith Keating, a director of three businesses owned by the JSE-listed company. 

The company’s share price gained 5.6 percent to R47.52.

The company’s share price plummeted more than 45 percent after a raid by the Independent Police Investigative Directorate (Ipid) on the homes of former acting national police commissioner Lieutenant-General Khomotso Phahlane and Keating, an SA Police Service contractor, who was recently fingered in an alleged tender scandal.

Keating was also accused of having paid for vehicles for Phahlane, his wife Brigadier Ntombizodwa Phahlane, and his sister. 

The EOH issue comes on the back of the scandal that brought global retailer Steinhoff International to its knees, losing hundreds of billions of rand in share price and claiming the scalp of chief executive Markus Jooste, who admitted making “big mistakes that have now caused financial loss to many innocent people”.

11. Zuma declares BRICS Bank 'open for business'

The BRICS (Brazil, Russia, India, China, South Africa) bloc of countries officially launched the Africa Regional Centre of the BRICS New Development Bank (NDB) in Sandton, in August this year. 

The BRICS bloc of countries signed the Agreement establishing the New Development Bank at the Sixth BRICS Summit in July 2014 in Brazil. 

President Jacob Zuma has presided over the official launch of the Africa Regional Centre of the BRICS New Development Bank (NDB) in Sandton, Johannesburg. 

Another key resolution taken at the Summit was to establish regional offices that would perform the important function of identifying and preparing proposals for viable projects that the New Development Bank could fund in the respective regions.

12. What’s ahead for WEF Africa 2017?

In May,  African leaders from all spheres met up in Durban at the World Economic Forum’s annual Africa meeting (WEF Africa 2017). They were joined by global business leaders, non-governmental organisations and many others who want to observe and help shape the continent’s future. 

This year’s theme was “Achieving Inclusive Growth through Responsive and Responsible Leadership”, which is a fitting follow on to the meeting held last year in Kigali. 

In order to improve and grow manufacturing on the continent, an enabling environment is key and this was highlighted during last year’s sessions. Reliable electricity, good transport infrastructure, efficient ports and borders - plus an enabling business environment are just some of the many things that are needed before local innovators and entrepreneurs can compete effectively on a world stage.  

Many sessions at WEF Africa 2017 were expected to focus on industrialisation and unlocking the industrial corridors across the continent.

13. Gauteng metro real house prices in decline

Gauteng's three metros - the cities of Tshwane, Ekurhuleni and Johannesburg - have been undergoing a gradual real estate price correction and have since 2008 all experienced a more than 20% cumulative reduction in house prices when adjusted for consumer price inflation.

John Loos, a household and property sector strategist at FNB, said cumulative real house prices had declined by 22.3% in Tshwane, 24.5% in Johannesburg and 25.5% in Ekurhuleni since the first quarter of 2008.

All three of Gauteng’s major metros continued to show low single-digit nominal house price growth in the third quarter of this year.

14. Avedia Energy will open a R240m Saldanha Bay plant

Liquefied petroleum gas (LPG) company Avedia Energy announced its plans in August to commission its R240 million Saldanha Bay plant.

The company’s managing director Atose Aguele said the company would initially use a ship-to-truck and truck-to-plant method when importing gas to its storage facility, which was at this point the most cost-effective method.

Avedia’s R250m facility has a 4000 ton capacity. In the sub- Saharan region, the most recent significant terminal was opened in March 2014 in Mauritius.

15. Mugabe leaves Zimbabwe in economic disarray

Former President, Robert Mugabe's resignation in November, left the economy in disarray. 

An estimated 95 percent of the workforce was unemployed while the public infrastructure is crumbling and there is widespread shortages of cash and food. 

Many of the country’s woes are rooted in Mugabe’s support for the seizure of white-owned farms, which slashed agricultural production, export earnings and tax revenue.

According to the Zimbabwe Human Rights NGO Forum, after February 2000, Mugabe allowed his supporters to take over white-owned land, disrupting farming and creating food shortages in a country that had once been the biggest corn exporter in southern Africa. 

16. Zuma wanted Molefe to replace Gordhan as finance minister: Duarte

In early Decmeber, President Jacob Zuma had proposed replacing former finance minister Pravin Gordhan with Brian Molefe, ANC deputy secretary-general Jessie Duarte revealed.

Duarte said this during an interview with the South African Broadcasting Corporation (SABC) , adding that the idea was, however, shot down by fellow top six members.

In the interview, Duarte said that Zuma brought up the former Eskom chief executive's name during a discussion with other top brass.

"We said no, we don't think that is going to be a useful change. Of course, there were very strong words used.

"He did say well, here's a young man who's put Eskom straight, why can't he assist us elsewhere."

17. KPMG embroiled in yet another auditing scandal

The auditing firm has had to fend off fresh allegations of mismanagement after being accused of overseeing what could possibly be the "biggest accounting scandal in the history of Botswana.

Botswana paper, Sunday Standard published an allegation made by a liquidator, John Little, from Kingdom Bank Africa (KBAL), accusing the auditing giant of misconduct by signing off its books even after the collapse of the bank two years ago. Little has since filled a lawsuit of close to R262m against the company on behalf of creditors. 

Filed court documents show the liquidation of liabilities, which followed the banks insolvency in 2010, totaling over R24.8m but the liquidator only recovered R65m from the bank's assets. The lawsuit also states that KBAL continued trading until 2014 despite its insolvency back in 2010 due to KPMG falsely reporting that the back was solvent, further incorrectly signing KBAL off as a going concern.

18. Zimbabwe massive cash shortages, a thing of the past

Zimbabwe has grappled with cash shortages since April 2016, largely due to externalisation and the hoarding of money. Reports suggest that roughly US$3 billion was externalised to Mauritius, the Far East and Botswana between the period of 2015 to 2017.

In a massive bit to stabilise a fragile Zimbabwean economy, newly inaugurated Zimbabwean President, Emmerson Mnangagwa in late November named a new cabinet, which comprised of both new and old political faces.

In his inauguration speech on November 24, President Mnangagwa pledged that his government would resolve the countries cash shortages.

“In the immediate, the liquidity challenges which have bedeviled the economy must be tackled head-on and must be dealt with as a matter of urgency."

19. Aveng CEO falls on his own sword

Aveng chief executive Kobus Verster resigned in September with immediate effect as the listed construction and engineering group embarks on another strategic review to address ongoing substantial financial losses by the group.

The group reported a net loss in the year to June of R6.7 billion and headline loss of R6.4bn following non cash impairments and write-downs on long-outstanding uncertified revenue of R5.9bn.

Excluding non-recurring write-downs and charges, the headline loss amounted to R630m.

20. Zuma to face mass cabinet walkout if he fires Gordhan

South African President Jacob Zuma faced a rebellion within his own party in March when he suggested that he was about to fire Finance Minister Pravin Gordhan. About 12 ministers considered resigning their positions.

Deputy President Cyril Ramaphosa and some deputy ministers were reportedly said to also resign. At the time officials would keep their seats in parliament and possibly support or abstain from a vote of no confidence in the president if he was called by the opposition or by members of the ruling African National Congress, they said. 


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