- October 31, 2014
- Posted by: admin
- Category: Niveus Investments
WHILE all eyes were on Hosken Consolidated Investments’ (HCI’s) annual general meeting on Thursday, an earlier gathering of shareholders in the conglomerate’s gambling and liquor subsidiary, Niveus, offered a boisterous sideshow.
Niveus has investments in limited payout machine gambling and electronic bingo as well as a controlling stake in wine and brandy producer KWV.
The meeting saw a tense clash between Niveus chairman Johnny Copelyn and long-time KWV shareholder Chris Logan of Opportune Investments.
Mr Copelyn took umbrage at Mr Logan’s inference that KWV did not have a CEO with deep liquor industry experience.
Niveus CEO Andre van der Veen serves as KWV’s CEO.
KWV, which has net assets of more than R1.2bn, has been a serial under-performer and managed only R1m in profits in the 12 months ended March after taking a hit on the hedging policy used to cover export wine sales.
Mr Logan complimented Mr van der Veen on running a slick alternative gaming business, but asked if KWV did not need to be headed by an executive with substantial experience in the liquor sector.
Mr Logan said larger rival Distell had no hesitation in appointing an industry expert in former SABMiller executive Richard Rushton to replace long-serving MD Jan Scannel late last year.
Mr Copelyn countered that HCI did not like an old boys club arrangement. Ironically, he used the example of the successes of departing Sabido CEO Marcel Golding at e.tv as proof “outsiders” could run companies they may not be familiar with initially.
“What did Marcel know about e.tv? Is Mr van der Veen an industry expert now? Yes, we think so.”
Mr Logan argued that considering the competitiveness of the local liquor market contested by large multinationals such as SABMiller and Pernod Ricard, the Niveus board was doing KWV a disservice by having a CEO who was not experienced enough.
Mr Copelyn reacted angrily to Mr Logan. “People with a far larger stake (in KWV) than you are happy with matters.
“Do you think the board is not capable of selecting a CEO? We think Andre van der Veen is suitable. No other analyst raises this matter … you are the only person who makes this point.”
Mr Copelyn, with the official starting time for the HCI annual meeting fast approaching, then declined to take further questions on the subject from Mr Logan.
Earlier in the Niveus gathering, Mr van der Veen stressed that when HCI bought control of KWV (from PSG-controlled Zeder in early 2011) the shares were priced at a deep discount to the underlying net assets. It was believed that it would take a long time to generate a return on them.
“We still feel this is the right approach … although achieving the right returns from KWV will take much longer than we thought when we bought the business,” Mr van der Veen.
Source: Financial Mail – Marc Hasenfuss