The Public Investment Corporation had concerns about governance at Steinhoff International, which is why the state asset manager increased its investment in the entity that imploded in December 2017.
The opportunity proposed by Naidoo allowed the PIC to appoint a black representative on the Steinhoff board and came with special voting rights, which is the solution the PIC, which held 6.5% shares in Steinhoff at the time, was looking for in order to “influence better governance” in the company.There have been questions around why the PIC would fund a transaction that was structured as a BEE deal but appeared to have only one BEE beneficiary in Naidoo.
Listing the governance challenges, Matjila said the PIC had tried to block the move by Steinhoff to place its primary listing on the Frankfurt Stock Exchange. It had also voted against non-executive directors who had served prolonged terms on the board, calling their independence into question. He added that the rights gave the PIC an opportunity to at least appoint someone on the board even though “they may not be perfect”.Assistant commissioner Gill Marcus sought clarity on this, asking why, after identifying governance concerns, would the PIC buy shares to influence governance as opposed to seeking returns on the investment.
A few months down the line, Steinhoff’s shares plummeted in the wake of the infamous accounting scandal, wiping out over R200 billion in shareholder value.
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