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Hours after Momentum finally reversed its position on the nonpayment of R2.4m life insurance to the widow of Nathan Ganas, shareholders at the AGM of Rand Merchant Investments (RMI) were listening to an explanation of the group’s seemingly much less rule-bound remuneration policy. Central to that policy is a "management participation scheme" introduced this year that stands to generate tens of millions of risk-free rands for RMI executives. RMI happens to be the single largest shareholder in Momentum, with a 26.5% stake. The holding company’s other investments include 89.7% of Outsurance, 25% of Discovery and 29.9% of UK-based Hastings. It houses Remgro’s insurance investments and was spun out of Rand Merchant Holdings (RMH) in 2011. RMH, which holds 34% of FirstRand and 100% of RMH Property, introduced a similar management participation scheme during the year. It turned out to be bad timing. Both RMI and RMH are trading at record discounts to their underlying NAV and some activist ...

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