After taking nearly twenty years to build a well-fortified investment empire, it took less than two weeks for one of the most lucrative investment partnerships in SA’s corporate history to fall apart in the most shambolic of fashions.
Last month Marcel Golding resigned his various posts in Cape Town-based Hosken Consolidated Investments (HCI) after falling out with long-time business partner Johnny Copelyn and major shareholder, the SA Clothing and textile Union (Sactwu.)
Golding and Copelyn were both former trade union stalwarts that embarked on business endeavours at the dawn of SA’s new democracy in the mid-nineties. Golding, who chaired HCI, and Copelyn, who served as CEO, built an R18bn investment empire from scratch.
HCI’s collection of assets include SA’e premier gaming assets, alternative gaming assets, liquor group KWV, coal mining, Golden Arrow Bus Services as well as the many industrial assets housed in Epping-based Seardel Investment Corporation and media and financial services assets in Australia.
The first asset the company acquired was television station e.tv, which Golding headed - as CEO of HCI’s media subsidiary Sabido - for close on 15 years. Golding spent the bulk of his time looking after the media assets, and Golding’s troubles at HCI also stemmed from his leadership role in Sabido.
Golding can hardly be faulted for his running of Sabido with e.tv proving one of the most profitable media assets in SA with profits well clear of R450m. Sabido today is reckoned to be worth close to R8bn.
But it seems that while Golding’s toiling at Sabido generated strong returns, his relationship with Copelyn took a turn for the worse in the last year. Golding also found himself estranged from HCI’s major shareholder, the SA Clothing & Textile Union.
It did seem efforts were made to ensure an amicable parting of ways – including a proposal for Golding to sell his HCI shares to acquire a significant stake in the media businesses (including e.tv). But SACTWU’s resistance to such a plan scuppered a possible deal – and deal that apparently Golding’s resignation from HCI hinged on.
In the end matters turned nasty with HCI throwing irregular share dealing charges at Golding for his unauthorised trading in the shares of electronics goods distributor Ellies. The transaction in question was worth a mere R24m, and most observers felt the charges were somewhat exaggerated.
Golding, on the other hand, suggested the Ellies deal was above board and executed on behalf of Sabido as a strategic thrust that formed part of e.tv’s recent move into satellite television via OpenView.
Golding countered that his refusal to bow to political pressure aimed at getting e.tv to cover stories that involved government initiatives had alienated him from Sactwu and the HCI board.
While aspersions were cast on both sides in court papers, the true tragedy is a break up of a fruitful partnership that not only created wealth but also many jobs. Shareholders were left stunned, some even asking at the AGM whether there was any chance the duo could patch things up again.
Both Copelyn and Golding read prepared statements at an emotional AGM last month. But Copelyn remained behind as CEO, while Golding vacated his seat and walked out of the HCI boardroom for good.
Copelyn noted, ‘The truth of the matter is that Marcel and I go back a long way as do Marcel and Sactwu. We have a lot of respect for each other. We have built a lot together and much of our legacies – such as they are – are tied to each other. I am proud of that history and I am proud to have travelled the last 20 years bound to each other in a business partnership.”
Golding said HCI’s entrepreneurial manner allowed the partnership to build “an interesting, exceptional and valuable company”. He also thanked Sactwu for their initial support “when I most needed it in the early days of HCI.”
But Golding’s message was tinged with some bitterness when reflecting on recent developments in HCI…and perhaps a veiled warning around the future of HCI. “My colleagues at HCI have won and I have lost and I will be leaving. My hope is that the legacy I have tried to build continues under the new leadership of the company.”