TRADE union-controlled empowerment giant Hosken Consolidated Investments (HCI) has bemoaned the significant regulatory challenges it faces in several of its key business holdings.

HCI — worth about R16.5bn in market capitalisation — holds a mainstay investment in gaming and leisure group Tsogo Sun, but also has influential or controlling stakes in media (mainly, alternate gaming (limited payout machines and electronic bingo terminals), liquor (KWV), coal mining, property as well as a variety of industrial interests under Deneb Investments.

In commentary accompanying the year to end-March results released at the weekend, HCI CEO Johnny Copelyn said that regulatory difficulties were probably a regular feature in the company’s work.

“But currently these matters are holding up the realisation of significant development of several of our businesses.”

Mr Copelyn said the proposed acquisition by Tsogo Sun of a substantial minority stake in the GrandWest Casino in Cape Town remained tied up in regulatory issues before the competition authorities and Western Cape Gambling Board.

HCI’s alternative gaming company Niveus was also bogged down by regulations. Mr Copelyn said the KwaZulu-Natal MEC for finance (Belinda Scott) had “purported to require we cease trading” in certain of our licensed bingo sites as well as taking exceptional measures to prevent the roll-out of electronic bingo terminals. He said legal challenges by parties who lost bingo bids in the Eastern Cape had prevented Niveus’s smooth roll-out of newly granted licences in the province.

Mr Copelyn said the continuing litigation also applied to the decision of Communications Minister Faith Muthambi to unilaterally abandon encryption in the set top boxes for DTT (digital terrestrial television). This decision affects HCI subsidiary Seardel, which controls and other broadcasting assets.

Source: BDLive – Marc Hassenfus