Edition: April / June 2016
Editorials

GRAVY

Back in the 1980s, the Oliver Tambo-led ANC was massively successful in getting foreign investors to withdraw from SA.

These days, unless there’s a prompt change in premiership following the Concourt decision on the Public Protector, there’s a huge danger that the Jacob Zuma-led ANC will do the same.


And if SA is relegated to junk status as an investment destination, there’ll be a singular benefit. It’s a mathematical certainty that the black-ownership proportions of the equity in JSE-listed companies will shoot upwards.

Big institutions from abroad, like pension funds, will be obliged to pull out. Almost half of the free floats in the Alsi’s top 40 companies is owned by foreigners. Those who depart will be replaced, probably on a significant scale, by SA pension funds which have millions of black members.

Then the JSE will be much more inclusive than Cyril Ramaphosa prefers to suggest. One might as well try to look for a bright side.


It was Nobel laureate Paul Samuelson who pointed out that economists had predicted nine of the last five recessions.

When taking fright at the present consensus, think about it and feel a little better.


Jamie Dimon and Warren Buffett are leading an initiative for the world’s largest fund managers to resolve the ongoing conflict between management autonomy and shareholder rights.

There’s a touch of irony in this. Dimon is chairman and chief executive of JP Morgan Chase; Buffett is chairman and chief executive of Berkshire Hathaway. By combining the two roles, they wouldn’t reach first base were the King code on corporate governance in SA applied to them.

What’s more, Dimon sets a fine example for the elevation of shareholder rights. On top of a $1,5m salary and $5m cash bonus, his compensation package for 2015 was increased by 35% to $27m.

Glad to see he’s doing so well, as if he was an innocent in the 2008 financial crisis.


Some senior employees at the Financial Services Board haven’t the time to enjoy holidays. In the past two years, executive officer Dube Tshidi and now-retired chief operating officer Gerry Anderson were respectively paid R803k and R970k for commutation of leave.

That shows real commitment, doesn’t it?


On the subject of the FSB, there must be good reasons why it wants to keep confidential the reports of Justice O’Regan and KPMG into the cancellation of dormant retirement funds’ registrations. Were it to release them unconditionally to deputy executive officer Rose Hunter, it would be shot of the expensive litigation that threatens.

So, to get a sense of the good reasons, await the replying affidavits. Or the response if there’s an application under the Promotion of Access to Information Act for the reports.


In the Zuma/Gupta flare-up, recall the wisdom of a legendary Johannesburg stockbroker.

Max Borkum was forced to the sceptical observation: “Blood is thicker than water, and money is thicker than blood.” When there’s both blood and money . . .


Congrats, Rupert!