The morbidly fascinating saga of Trustco, the controversial Namibian investment group, took another turn last week when a significant minority investor called for a shareholder meeting to consider a radical board shakeup.
To some observers, the most remarkable aspect might be that any shareholder feels so strongly about Trustco, which has long been suspended on the JSE since failing to publish its annual results to end-August 2024. By the end of this month, it will be officially late with its results to end-August 2025 — not an illuminating delay at all.
In any event, the Riskowitz Value Fund (RVF), an entity aligned to mercurial investor Sean Riskowitz, is tilting for board-level change at Trustco. RVF is not going into the fray half-heartedly; it wants the entire Trustco board — including founder, majority shareholder and prime mover Quinton van Rooyen — to resign.
In their stead would be Grant Pattison, Dee Sauls-Deckenbrock, Jerome Davis, Sepo Haihambo and Robert Hutchinson-Keip. On paper that would usher a corporate heavy hitter (Pattison), two bankers, a chartered accountant and a lawyer into the Trustco boardroom. Pattison is best known to local investors for having headed retailers Massmart and Edcon as well as having been recently appointed to the Pick n Pay board.
There is a previous link between Pattison and Riskowitz through the old Taste Holdings/Luxe, which RVF and other Riskowitz-aligned investment entities backed. Pattison was briefly a nonexecutive at Taste/Luxe, which famously flopped first in pizza (Domino’s) and coffee (Starbucks) and then quickly lost its lustre as a jewellery specialist.
As an impartial observer, I sincerely hope RVF gets this one right. The recent track record — Taste/Luxe and a capitulated Conduit Capital — hardly makes for comforting custodianship credentials, though the RVF flag is still flapping at Finbond.
RVF contends the initiative reflects shareholder determination to “restore Trustco to its former strength, ensure productive use of the company’s assets, improve corporate governance and empower employees to build a sustainable and proudly Namibian company”.
I suppose that contention rests heavily on what the missing financial statements reflect, given the huge change in fortunes for the diamond industry in recent times, but also a brighter outlook for the Namibian economy thanks to oil/gas and other commodity discoveries.
At the time of writing, the Trustco board had merely acknowledged RVF’s call for a shareholder meeting, adding that it was “considering the content and validity of the demand”. If the meeting is convened, things might well go to the wire, with RVF probably commanding much more influence than its “official” 23.6% shareholder position reflected in the 2023 annual report.
The weird thing is that until recently things had looked pretty sweet between the Riskowitz Value Fund and Trustco
The weird thing is that until very recently things had looked pretty sweet between RVF and Trustco. Last year RVF had agreed to take 400-million Trustco shares (at 117c each) as settlement for selling a stake in Legal Shield — which houses insurance, assurance and real estate assets — back to Trustco. RVF even offered a line of “hybrid capital” of up to $100m to Trustco. It may be that new developments in and around Trustco have spurred RVF into action — specifically the proposals for mystery Cayman Islands-based investor VeldBridge — to buy out the Van Rooyen family’s shareholding in exchange for scrip.
To date, the backers of VeldBridge have not been disclosed, a rather curious omission considering the inferred scale of the transaction and the hints at listing on the Nasdaq. The next few weeks could get really interesting.
Speaking of omissions, our Movers and Shakers column did not mention Argent’s plain-talking CEO, Treve Hendry, snapping up 10,000 shares for the princely sum of R284,000 after well-reinforced interim results were released. It’s not the biggest director’s deal recorded, but it’s significant because Hendry had been a seller of Argent stock after the 2025 final results in July. Whether he intends to stock up further remains to be seen. So far, he is styling on the 10,000 share tranche with Argent’s shares above R32.
The Argent share is not exactly richly priced on a forward earnings multiple of just over five and a forward yield of probably 4.5%. The offshore hub, churning mostly around UK niche engineering businesses, generated R136m in the six months to end-September — double, even at a reduced 20% margin, the profit donation from the local hub. While South African operations (including fireplace maker Jetmaster and security barrier business Xpanda) crimped at top line to R757m, the operating margin was encouragingly reinforced at 8.3%. This meant operating profits of R63m beat the R56m from the last interim period.
The standout performers were the construction materials operations, in the form of Megamix and Villiersdorp Quarries. Hendry, who is not prone to exaggeration, tells me: “Megamix is flying.” I’d wager a few Zcash coins that Argent will offload these businesses sooner rather than later.
I can’t imagine — never mind the booming conditions in the Western Cape — that Argent wants to splurge more capital on heavy equipment when the construction cycle might turn viciously down again in a couple of years. But there could well be a few enthusiastic buyers for these assets, especially those coveting a wider operational span in the Western Cape. I note this purely out of mischief: cement company Sephaku now has a significant new shareholder in well-known portfolio manager David Fraser (along with “related parties and parties acting in concert”).
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