Power play and conflict
NEWS ANALYSIS: High noon looms for Group Five
Backroom manoeuvres have featured at Group Five, where shareholder Allan Gray wants a completely new board
High noon looms for construction company Group Five as a precedent-setting vote to install an entirely new board of directors will take place on Monday.
The meeting was called by 25% shareholder Allan Gray, whose director, Andrew Lapping, said he had "lost confidence" in the board — the first time a shareholder has taken such a bold step. Ahead of the meeting, Group Five’s board, led by chair Philisiwe Mthethwa (wife of arts & culture minister Nathi Mthethwa), promptly resigned.
Philisiwe Mthethwa believes the vote will be a tightly contested affair. "I think it will be 50/50 because I know that some shareholders feel Allan Gray must be told that what it’s doing is in violation of corporate governance rules," she told the Financial Mail. It seems wishful thinking, considering that a number of other shareholders — including 15% shareholder Coronation — have confirmed to this publication that they will be supporting Allan Gray. Nonetheless, there have been some intriguing backroom manoeuvres in recent days. This week, the state-owned Public Investment Corp (PIC) revealed it had hiked its stake in Group Five to 20.1%. Philisiwe Mthethwa’s brother, deputy finance minister Sfiso Buthelezi, chairs the PIC, and the institution appears to be building up a stake to oppose Allan Gray.In the circular sent to shareholders, Mthethwa’s board says some of the shareholders the company spoke to are "opposed to the manner of Allan Gray’s approach to reconstitute the board". ...
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