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HCI intrigue and insinuation

HCI intrigue and insinuation

Allegations of political interference at TV station e.tv and unauthorised buying of Ellies shares, has led to the suspension and resignation of Hosken Consolidated Investments Limited (HCI) executive chairman Marcel Golding. Golding faced disciplinary charges after he bought around R24m of Ellies shares on behalf of Sabido, the HCI subsidiary that houses its digital media assets, including e.tv.

HCI is a black empowerment investment holding company, which is listed in the financial sector on the JSE Securities Exchange South Africa. HCI’s major shareholder is the SACTWU Investment Group, the investment vehicle for the South African Clothing and Textile Workers Union. The group is involved in a diverse group of investments including:

  • Hotel and leisure
  • Interactive gaming
  • Media and broadcasting
  • Transport
  • Mining
  • Clothing
  • Properties

Ellies shares

Kevin Govender was named acting CEO of Sabido after Golding’s resignation and was questioned by shareholder activist Theo Botha into Govender’s trades in Ellies’s shares. The issue of Govender’s trading in Ellies shares was stated in Golding’s Labour Court application to have his disciplinary hearing declared unlawful.

In his court affidavit Golding said, "At one point Govender did say to me that he had had cause to have misgivings about the management of Ellies, which made Govender sell his own Ellies shares. This was the first time I had heard Govender was actually trading in Ellies for his personal account."

HCI CEO Johnny Copelyn said on Wednesday he was satisfied Govender had not transgressed any rules or ethics even though he became aware of Govender’s trading in Ellies shares only recently.

Copelyn, who was a SACTWU leader for about two decades, also wrote in a statement that he and Golding had worked together for a long time and built several successful businesses together.

 “Marcel’s trades were concealed from the company, its board who had to authorise the trades, and shareholders of Sabido – who had to authorise such a purchase. The shares were paid for through a private arrangement Marcel made with a broker and were not registered in our name,” Copelyn wrote.

“They were held in the name of a banking institution with an understanding they would be transferred to the name of a party, the identity of whom Marcel would disclose to them, but has not.”

Golding had made a “serious blunder when he accumulated shares in another company without financial approval. Worse, he has to date made no apology.”

Copelyn added that HCI was not a share trading company, but one that took controlling or strategic stakes in businesses. "Our share transactions only commence once we have decided on a mandate at board level to take a strategic stake. Marcel’s mistake was that he started (buying Ellies shares) without that mandate."

HCI nonexecutive director, chairman of its audit committee and would-be chair of Golding’s disciplinary hearing, Lesley Maasdorp, said he was not aware of Govender’s trade in Ellies.

"Those guys (Golding, Copelyn and Govender) are executive directors and have conversations between each other all the time. The information in Mr Golding’s statement was all new to us (nonexecutive directors.)”

Golding said he first told Copelyn and Govender of the share deals in August last year and held several informal discussions with them about it before the HCI board meeting of August 6 that led to him facing disciplinary charges.

Fall-out

Since Golding’s resignation, claims of political interference from SACTWU have come to light, and Golding himself has suggested that the reason he has been targeted was because he resisted pressure from the union to cover certain stories on the e.tv platform that place the Zuma-led government in a good light.

This political interferance was refered to in Barbara Hogan’s resignation letter to the HCI board as she stepped down as non-executive board member. Hogan, the former minister of public enterprises, added that she was dismayed at the manner in which HCI dealt with its inquiries into the share transaction by Golding. 

Two days after Hogan’s resignation, COO of e.tv, Bronwyn Keene-Young (Golding’s wife) resigned as well, also citing political interference. Copelyn said he was dissappointed by Keene-Young’s resignation, saying that she had contributed to the growth of e.tv, but said he understood her position.

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