UPDATE: A previous version of this article, published in print, went to press before enX and Warren Chapman could provide their right of reply. This digital version has been updated to reflect their full responses. The print version is retracted.
Once a broad industrial conglomerate with interests spanning fleet management, lubricants, chemicals and power solutions, enX has methodically divested its core assets. As the company slims down into a significantly smaller entity, the focus of some of its stakeholders has turned to the financial mechanics of its wind-down, prompting questions regarding historical transactions and capital allocations.
During the company’s AGM on March 12, shareholder David Brouze raised concerns regarding a historical R15m indemnity payment made by enX in favour of the Industrial Development Corporation (IDC). The indemnity originated from a B-BBEE financing structure approved by shareholders in June 2015—a resolution Brouze himself voted in favour of at the time.
In response, enX CEO Robert Lumb explained that the R15m payment was a non-discretionary, binding contractual obligation. The payout was triggered when the IDC exercised its right under a shareholder guarantee issued by CapLeverage, an entity associated with former enX chair Paul Baloyi.
Lumb clarified that the board had obtained legal advice and considered whether recovery action would be commercially viable before concluding that such action was not in the best interest of the company. “The board acted in accordance with its fiduciary duties in assessing and executing this obligation,” says Lumb.
Subsequently, Rudolph du Plessis of Norton Rose Fulbright, enX’s legal representative, confirmed that the board would not engage in any further consideration of the matter, as it had been “appropriately considered by the board”.
While management notes that the issue had been addressed through extensive prior legal correspondence with Brouze’s representatives, Brouze maintained that he was not satisfied with the answer provided by Lumb.
Former asset manager and enX shareholder, Craig Butters, views the conclusion of the matter as a dismissal.
“I am concerned about how a reasonable question was shut down, especially in light of the background to the question,” says Butters, who attended the AGM online. But Lumb maintains that theirs is “a concluded and reasonable position”, which was fully explained at the AGM and not at all a refusal to engage.
In 2015, the IDC funded a company called Samvenice to buy a stake in enX. Samvenice was controlled by Baloyi and Paul O’Flaherty (now CEO of Metair), who were both enX directors at the time. During this period, the eXtract Group had a funding arrangement with enX. In 2017, the eXtract debt arrangement was settled through a transaction whereby enX shareholders received eXtract shares for each enX share held at the time; it delisted in 2019, though Samvenice kept its shares, as received through the debt settlement transaction, in the company.
Butters raised his concerns regarding a 2021 transaction involving eXtract shares. At the time, Baloyi’s entity, Samvenice, sold 1.37-million eXtract shares to African Phoenix Investments, which were then transferred to Hampden Capital, an entity linked to former director Warren Chapman, for no consideration.
“Based on the price at which I traded eXtract shares at the time, Samvenice’s sale amounted to it selling its shares at R21.2m below fair value to African Phoenix, after African Phoenix had transferred the same number of shares to Chapman’s company for free,” says Butters.
Chapman explains that the transfer formed part of a structure implemented by Peresec to mitigate its financial and operational risk and to “rescue” eXtract and enX after a client default. Shortly after Samvenice took that substantial loss, Baloyi bought 1.8-million shares in enX at a discounted rate of 560c (the market price was 780c).
“By my calculations, this somewhat compensated Baloyi for his share of the loss in an amount of R4m. On the face of it, the transactions were as carefully orchestrated as they were commercially dubious,” says Butters.
Chapman emphatically denies these allegations, explaining that the purchase was part of a parcel of shares offered to enX management and transacted on the JSE at the same time. “Samvenice was underwater with regards to enX and eXtract from inception, and Mr Baloyi was never in the money on his investment in Samvenice.”
Butters argues that the company should further investigate these historical transactions, and he believes that enX’s money is being used to make Baloyi “whole” for taking that initial financial hit to benefit Chapman.
“This characterisation is not supported by the facts,” says Chapman. He states that the R15m payment was not discretionary, and it arose from shareholder-approved indemnity; it had nothing to do with Peresec or him.
Butters cites Du Plessis’s dual advisory roles, acting both for the beneficial enX shareholders that benefitted from the transactions and for enX, which paid the indemnity on behalf of its former chairperson, and says, “In the circumstances, his refusal to recommend any further investigation appears tainted by this conflict of interest.”
Lumb strongly disagrees, saying Du Plessis merely repeated enX’s position that no further action will be taken in this regard, as the matter had been dealt with and the payment was non-discretionary. “The board does not believe that there is any conflict of interest.”
EnX’s group financial results for the year to end-August 2025 illustrate the scale of this operational contraction. Revenue dropped to R378m from R557m the previous year. The company noted that the R15m once-off payout hurt its financial results, leaving a profit before tax of just R15m (down from R22m). However, this does not reflect trading performance, according to Lumb. “On an adjusted basis, underlying profitability remains stable and in line with expectations, given our disposal strategy.”
The NAV per share has nearly halved from 906c to 524c, primarily due to the payment of two special dividends, rather than any destruction of value or the indemnity payment.
The company’s chemicals, lubricants and fleet management segments have all been classified as discontinued operations or sold off entirely. Continuing this strategy, enX announced its intention to dispose of its remaining 75% in West African International to Trichem South Africa. This pending transaction will leave the group with a limited operational footprint, primarily consisting of its power division, where revenue is down due to reduced load-shedding.
