https://www.engineeringnews.co.za

Steinhoff scandal shows need for activist shareholding – JSE CEO

26th January 2018

By: Reuters

  

Font size: - +

An accounting scandal involving retailer Steinhoff has highlighted the need for more activist shareholding and more vigorous oversight by boards, the chief executive of South Africa's stock exchange operator said on Friday.

Steinhoff, which owns more than 40 brands including Poundland in Britain and Mattress Firm in the United States, admitted "accounting irregularities" last month.

That prompted an 85% share price slide that wiped more than $10-billion off the value of a company listed in both Johannesburg and Frankfurt.

"There is definitely a recognition of a need for more activist shareholding," said Nicky Newton-King, CEO of South African stock exchange operator JSE Limited, speaking on the sidelines of the World Economic Forum in Davos.

"There is a recognition that, particularly in cases where you have very charismatic leaders, there is a need for more vigorous oversight by boards," she added.

Steinhoff's top two executives have resigned, as well as its chairman, and the group is currently being run by an acting chief executive.

The company is battling a liquidity shortfall following the accounting problems. On Monday it sold a stake in investment firm PSG Group for R7.1-billion ($600-million), after securing €60-million ($75-million) from South African lenders the previous week.

"It is not a uniquely South African issue but it is incredibly disappointing for that to have happened in an environment that we are so proud of," added Newton-King.

Despite the problems at Steinhoff, Newton-King said the "South African narrative is definitely feeling on the up," after Cyril Ramaphosa narrowly won the race to succeed President Jacob Zuma as head of the ruling African National Congress (ANC).

"I would think that in a more positive environment, certainly one in which people are wanting to raise capital for long term investment, both the number of IPOs and capital raised will trend in a positive direction," she said.

During his ANC party leadership election campaign, Ramaphosa - a 65-year-old former trade union leader and one of the country's wealthiest businessmen - vowed to address record unemployment and a sluggish economy.

Markets have rallied since the victory of Ramaphosa who said South Africa wants to attract foreign investors to help kick-start economic growth. He has also promised to crack down on corruption.

South Africa's central bank governor, also speaking in Davos, said Ramaphosa's appointment had removed political uncertainty that contributed to the depreciation of the rand.

Edited by Reuters

Comments

Showroom

Hanna Instruments Image
Hanna Instruments (Pty) Ltd

We supply customers with practical affordable solutions for their testing needs. Our products include benchtop, portable, in-line process control...

VISIT SHOWROOM 
John Deere (Pty) Ltd
John Deere (Pty) Ltd

In 1958 John Deere Construction made its first introduction to the industry with their model 64 bulldozer.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.171 0.229s - 176pq - 4rq
Subscribe Now