THERE is perhaps significance in the timing of Mike Tshishonga's resignation as chairperson of meat company Best Cut Holdings.
Tshishonga, a former deputy director-general in the department of justice who blew the whistle on former justice minister Penuell Maduna's relationship with liquidator Enver Motala, resigned from Best Cut with immediate effect on Tuesday.
Now Best Cut - at the time of going to press - had still not published its year to end-June results, which obviously raises some concern around exactly how much meat there will be on the bottom line.
One needs to remember that last year an underperforming Best Cut opted to hand back a vast chunk of its operations to the original vendor, Alexis Steenkamp, who seemed frustrated by not being able to place his scrip settlement in the market.
As far as Finweek can gauge Tshishonga still remains a director of StratEquity Empowerment Investments, which - unlike most other investment entities - showed an appetite for Best Cut ahead of its reverse listing.
In fact, Best Cut remains one of the biggest equity investments in StratEquity Empowerment Investments' portfolio - representing about 9% of the value.
Best Cut last year represented almost 30% of the portfolio value for StratEquity Empowerment Investments. One would like to say that the percentage changed because StratEquity has diversified its portfolio to include more sensible blue-chip investments - but the truth is that Best Cut's value has fallen from about 80c to less than 30c on the JSE.
One has to question why StratEquity - a division of AltX-listed financial services group StratCorp - put empowerment backers (many investing on a debit order basis) into Best Cut. Surely if the professional investors were not enamoured with Best Cut's prospects - even in the midst of a new listings boom - it might have been prudent to steer clear?
Perhaps one has to look at some related party interests here, especially the relationship between Best Cut CEO Thomas Hill, StratCorp CEO David Harington and Tshishonga.
Besides his association with StratEquity Empowerment Investments, Tshishonga - prior to the listing of Best Cut - was a StratCorp director. Harington and Hill have some kind of corporate history, which is evidenced in their directorship of a company called Electiv Lifestyles Financing.
Was the StratEquity Empowerment Investments perhaps a convenient fall-back option for Best Cut to raise capital prior to its listing?
One has to look at this coldly. Best Cut benefited from empowerment funding and StratCorp - via StratEquity - no doubt earned commissions and fees for rustling up the investment. The empowerment investors... well, they will soon know the score as regards their Best Cut investment.
Tshishonga, interestingly, is also listed as a director at StratCorp Empowerment Holdings, and was - last time I delved into the company - nominated as the official spokesperson. Last week this column mentioned how SEH had seen fit to rescue a struggling StratCorp with a R28m cash injection earlier this year, subscribing (or should we say "overpaying") for about 56 million shares at 48c/share.
While Best Cut suggests Tshishonga is keen to make an entry into politics, I hope he will be sticking around at StratEquity Empowerment Investments and SEH. Someone needs to fend for (maybe even fend off) a multitude of empowerment investors that are staring down some rather nasty paper losses.
Diversity in adversity
One thing I remember about the arse-end of the late 1990s listings boom was that a number of small cap counters started desperately diversifying away from their core business.
That development was driven by no other reason than the fact that the business originally brought to the market had started to fizzle, or had collapsed.
So a number of financially vulnerable counters mobilised their last smidgens of cash or fast devaluing scrip to broaden operations. With new operations came renewed hope - well, briefly anyway.
With this in mind I was morbidly fascinated to see Finbond Group - which listed as a mortgage origination and specialist loans business in 2006 - is busily building up its investment property division.
It's always a good exercise to dig out the old listing documents, just to see how far directors are veering from the original strategy.
In this regard Finbond's prospectus makes interesting reading - especially the fact that there's nary a mention on specialising in property investment.
Anyway, I do note that Finbond CEO and major shareholder Willie van Aardt held an option to acquire 50% of the properties acquired by the company. For some reason Van Aardt did not renew the option, which facilitated Finbond's entry into the transaction.
How very reassuring - not to mention awfully convenient.
Resigning retailers
The retirement of Raymond Ackerman as chairperson of Pick n Pay perhaps obscured another resignation involving another legendary retailer.
Before we get to that, I can only congratulate Mr A on an astounding corporate career that has generated many, many happy returns for shareholders over the last four decades.
What more could anyone ask - except that SA continue to produce entrepreneurs of this ilk.
While Ackerman's retirement grabbed the headlines, the news that retail tycoon Christo Wiese had stepped down as a director of KWV Holdings went unnoticed.
Wiese, who played a key role in dusting off KWV's musty old cooperative image, swopped his meaningful stake in KWV for another meaningful stake in PSG. PSG's KWV stake today is housed in Zeder, which seems to have significant influence at the Paarl-based liquor company.
Someone suggested to me that with Wiese off the KWV board, the way surely is paved for closer cooperation between the company and Remgro-owned Distell.
Indeed Wiese and Johann Rupert - although they seemed fairly chummy at a recent KWV function - have had their differences in the past.
Something to drink in anyway...
- Fin24.com