A picture is worth a thousand words. The photograph adorning this week’s column might not be essay-worthy, but it could trigger a response that is nasty, brutal and short — with several expletives thrown in.
Top retail executive Grant Pattison, the former boss of retail giants Massmart and Edcon, is no Ansel Adams. But his cellphone camera snap captured the real lie of the land at the general meeting of controversial Namibian investment company Trustco in Windhoek last week.
The meeting was called by large shareholder the Riskowitz Value Fund (RVF), for the purpose of removing all the Trustco directors. Pattison is one of the directors RVF nominated to Trustco’s board.
His picture shows Trustco chair Raymond Heathcote presiding over the meeting — the very meeting that he ruled was called under a defective notice. This precluded any “valid” voting taking place.
What exactly was invalid? Namibian company law differs from South African law in that a shareholder can ask the board to convene a shareholder vote, and if the board fails to do so, the shareholder can call a meeting itself. The RVF did just that …
In this instance it seems that not only did the board frustrate the shareholders’ vote by initially refusing to call the meeting itself, it then frustrated the shareholder-called meeting by inserting its own interpretation of the “days’ notice” clause. This was overseen by a chair who could be considered conflicted (should Heathcote chair a meeting at which he is the subject of the vote?). It seems churlish and obstructive — after all, the board would have seen the first notice of an intention to call a shareholders’ meeting back in November.
For the sake of argument, give Trustco the benefit of the doubt here — even if it seems the defective notice argument revolves around whether only working days, not weekends, should be counted in the notice period.
It might be difficult to make out from the accompanying picture, but the projected screen behind Heathcote shows the results of the proxy vote. Though it was declared invalid, it’s significant to see votes for removing Trustco’s current board of directors — including Heathcote — tally 418-million compared with votes against it of just fewer than 411-million. If the meeting had been valid, the directors would have been ushered out of the boardroom. So I’m pretty sure the next assembly convened by the disgruntled shareholders will leave nothing to chance.
Trustco, on the other hand, was not short on bravado after the meeting. A press release stated: “The foreign hostile takeover bid advanced by RVF was rejected on all fronts.” Trustco also claimed that RVF could not secure a majority vote on the “substantive requisition” to reconstitute the board.
If the meeting had been valid, the directors would have been ushered out of the boardroom
I’m not sure how the group backs up that statement, with Pattison’s photo showing quite the opposite. What’s more, a verification report from Sentio Consulting confirms that 43.75% of eligible votes were for removing the current Trustco directors and that 42.96% voted against it, with about 10.7% abstaining. Roughly the same percentage voted for appointing new directors.
It’s a Pyrrhic victory for Truscto’s current board. RVF will almost certainly take another tilt. Quite frankly, any additional weeks or months this effort takes is likely to secure RVF further shareholder support, especially if Trustco can’t publish audited financial statements for 2024 and 2025.
RVF reiterated that its push for board reconstitution stems from sustained governance, regulatory and performance failures. These include Trustco’s shares being suspended on the JSE since January 2025 because the group has not published financial statements since February 2024. Trustco has also seen some nasty skirmishes — being twice sanctioned by the JSE for noncompliance and being told to restate its financial statements, and there have been regulatory and legal disputes with the Bank of Namibia and the Namibia Revenue Agency.
These issues have hardly induced contrition at Trustco. The group’s media release trumpets: “In international capital markets, a hostile takeover refers to an attempt to obtain control of a company without board support. Today’s proposal by a foreign fund sought to reconstitute the board without board recommendation.”
Trustco goes on to say that it remains focused on operational performance, capital discipline and long-term value creation — ironically adding that control of a listed Namibian financial services group requires majority shareholder support. “That mandate remains intact.”
A more impartial observer would be concerned about shareholder rights, which appear to have been snuffed out by hammed-up procedural issues.
Key to future developments is Trustco’s astounding contention that the recent Legal Shield Holdings (LSH) transaction — worth R468m — is being “fully unwound”. Last year RVF sold back its shareholding in LSH to Trustco in exchange for about 400-million Trustco shares. LSH is Trustco’s main operating subsidiary, housing its financial services and sprawling property interests.
Trustco claims the transaction, which was approved by shareholders in early December 2024 and declared unconditional in January 2025, was clinched on the “express and material basis” that it would not result in any change of control of Trustco, “whether direct or indirect”. Trustco argues that by requisitioning a meeting to remove the board and install its own nominees, RVF used shares received under the LSH deal to pursue an outcome the transaction expressly prohibited.
As far as I can make out, RVF has already taken ownership of 200-million Trustco shares, with 200-million still outstanding. I very much doubt the matter will be “fully unwound” any time soon. Legal wrangling will be prolonged. Still, Trustco states in its press release that about 400-million shares are being returned to treasury — “a direct and material gain for every Trustco shareholder”.
I suspect RVF would beg to differ … possibly other shareholders too, considering how glowingly Trustco framed the transaction in its announcement in late April 2024.
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