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Cape Town - Remgro chairperson Johann Rupert told shareholders at the group's AGM in Stellenbosch on Thursday that the downturn globally - triggered by the sub-prime crisis - could be a prolonged affair.
Rupert, who warned of the financial crisis early last year, said the downturn - or recession - could last between five to 10 years as banks and major financial services companies cleaned up their operations.
"It's been a bit like getting overweight from eating, drinking and smoking too much, and then been told you have to run a marathon. For some it would take three years just to walk a marathon. So now you have frantic attempts by investment banks to get assets off their balance sheet."
"The best we can hope for - and it won't be quick - is that the system won't collapse in the process."
Referring to the financial shake-out in the wake of the sub-prime crisis, Rupert suggested it was still very risky as there could still be a few skeletons in the closet
"There could still be too much stuff floating about that we don't know about?"
Rupert also provided a colourful précis of the financial crisis in the US when he likened the role of the Federal Reserve to a responsible bar-keeper who needed to shut the bar when everyone was having a good time.
"Not only did they not shut the bar, the people who drove home drunk were brought back to the bar."
Moving to company matters, Rupert told shareholders that he would be buying more Remgro shares after the proposed unbundling of the company's holding in British American Tobacco (BAT).
He stressed shareholders should rather listen to investment advisors around the BAT transaction than follow advice in a "bilingual weekly magazine" - a not-so-subtle swipe at Finweek's recent cover story ("Where there's smoke", July 24).
Rupert also pointed out that over the longer term, Remgro - which has split off Richemont (1998) and Venfin (2000) - produced returns that had comfortably outstripped the JSE's industrial index as well as the All Share index.
Rupert also entertained a number of questions from shareholder activist Theo Botha, which largely covered issues around corporate governance. An expanded report on this matter will be available in an upcoming Finweek.
* The writer holds shares in Remgro.