African Phoenix Investments (API) has got itself into a spot of bother. Its plan to buy out preference shareholders at a huge discount to face value has bumped up against one of those creatures rarely seen in SA — a shareholder activist. API’s opportunistic plan to pay R506m for R1.13bn of preference shares relied on SA investors behaving in that traditionally sheep-like manner that makes them such easy prey for "innovative" investment bankers like the team behind API. API, which arose out of the ashes of African Bank Investments Ltd (Abil), is hoping to buy back and cancel all 13.5-million of the preference shares issued by Abil in the 10 or so years leading up to its collapse in 2014. But it doesn’t want to follow the age-old tradition that has underpinned a vibrant preference share market and pay face value for the preference shares. Instead it says it will pay the long-term market price, which is R37.50. This would be reasonable enough if dealing with an ordinary share, but much...

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