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Cape Town - The proposed merger of casino groups Tsogo Sun and Gold Reef Resorts (GRR) has seen its first casualties at board level.
According to an announcement regarding the merger on Tuesday, four GRR executives - including CEO Steven Joffe - opted to step down following the appointment of Tsogo CEO Jabu Mabuza as CEO of the merged entity.
Joffe, along with GRR financial director Jarrod Friedman and other directors Christian Neuberger and Tapson Sadiki, decided not to accept proposals around "alternative positions".
Tsogo's financial director Marcel von Aulock has also been appointed financial director of the merged entity.
While the merger was always likely to be dominated by the larger Tsogo Sun, market watchers expressed surprise that well-respected and experienced GRR executives would be walking away from the merged entity.
The GRR executives noted that the proposals around alternative positions constituted a "material change to their existing duties and responsibilities".
GRR added that the board of the merged Tsogo/GRR entity would comprise appointees from Tsogo Investment Holding Company and SABMiller, which will be the two biggest shareholders in the enlarged casino group.
The new board would consist of a majority of non-executive directors. GRR pointed out that the composition would not be compliant with the King code on corporate governance.
GRR reckoned the majority of non-executive directors in the merged entity would not be considered independent.
- Fin24.com