Joffe dismisses ‘naive’ critics

Image courtesy stock.xchnge (KillR-B)

If anyone thought Bidvest and the PIC would not take steps to secure their combined R6.2bn investment in Adcock Ingram then they are simply naive, says Brian Joffe, CEO of Bidvest.

This follows the publication of an Adcock Sens announcement that Bidvest and the PIC had imposed “demands” late on Tuesday afternoon, including the appointment of four nominated directors and the resignation of chairman Dr Khotso Mokhele.

If the demands were not met within 80 minutes (the deadline given was 5pm) then the two majority shareholders would convene a meeting of shareholders to consider resolutions to affect their demands.

As a result some newspaper headlines have shrieked that Bidvest is “bullying” Adcock Ingram.

“The outlook for Adcock is not looking great,” says Joffe. “Being the shareholder we are, we wanted to appoint some directors to the board to ensure that advances can be made. The PIC thought the same – independently of us.

“The (Adcock) chairman and I met some weeks ago on this. The chairman indicated that he would be more than willing to appoint representatives from the two largest shareholders to the board.

“I phoned the chairman yesterday morning at 9.30am and explained that we needed to proceed with some reconstruction of the board to make these advances. He was very accommodating of this fact and said he would not stand in our way.

“He said he would stand down. It is not pleasant being asked to stand down, but he dealt with this in a very professional and nice way.”

This is not a big deal, Joffe added. “It is only lawyers and journalists who make it thus.”

In the Sens announcement, Adcock confirmed Mokhele had stepped down; but noted that it had not had time to follow its own governance processes necessary for the appointment of the nominated directors.

As such it informed shareholders that it would convene the requested shareholders meeting, on or before March 4th.

The nominated directors include Brian Joffe, Lindsay Ralphs (CEO Bidvest SA); Dr Anna Mokgokong (chair of Community Investment Holdings) and PIC nominated Roshan Morar (MD of auditing firm Morar Inc).

Adcock Ingram should reasonably have foreseen this eventuality, says Gerald Seegers, director of human resources services at PWC, but there was probably little they could do to fast track the request until it had been formally made.

“Adding representatives to a board is not an unusual request, but there are processes to go through. I’d expect though that they can now accelerate this process.”

A meeting of shareholders is not necessary to add directors to a board, as long as a process is followed and the labour laws adhered to.

The new Companies Act is there to protect all stakeholders, but the truth is that if two big shareholders are operating in synch, the life of reluctant minorities will become more difficult, Seegers notes. “It will be very difficult to disagree with them.”

Joffe of course is hoping to move forward with as little pain as possible.

“My hope is that the Adcock Board will state that they are happy to appoint the nominated directors and that this will enable the business to go forward. This is not a bullying or aggressive approach. We can’t have different views on the way forward; there do have to be changes.”

today in print