Rebosis Property Fund has made history for the second time in just a few months. And, sadly, it is again for the wrong reason. In November, it became the first SA real-estate investment trust (REIT) not to pay out a dividend since 2013. That was the year when the REIT capital structure legislation came into effect.
And last week it became the first JSE-listed entity to score an 80% vote against its remuneration implementation report.
That 80% record was how the ordinary shareholders voted. In addition, just over 73% of A shareholders voted against the implementation report. However, a remarkable 94.99% of A shareholders voted against the actual remuneration policy. That is a record that Rebosis is likely to hold onto for some time.
Both the A and ordinary shares have been hammered in the last two years with the ordinary shares plummeting from a high of more than R13 in February 2017 to a current 41c. The steepest part of that fall was during 2019. In the past year, the A shares have fallen steadily from a January 2019 high of R22 to a current R2.60.
It’s not only tough local conditions that have hit the property fund; in financial 2019 it was forced to write-off R1bn as it extricated itself from a disastrous foray into the UK property market.
At the 2019 AGM, 55% of ordinary shareholders voted against the remuneration policy and 61% against the implementation report. It seemed, from subsequent engagements with the remuneration committee, that shareholders were concerned there was no long-term incentive scheme in operation and that there was no disclosure of performance targets and achievement against those targets. In addition, malus and claw-back clauses, which have become standard to remuneration policies, had not been implemented.
Evidently the committee’s attempts to address these concerns have been wholly unsuccessful.
Tongaat shares slump on JSE
Tongaat Hulett received a nasty reception on its return to the JSE after a suspension of about seven months.
This suggests that, despite efforts by the troubled company’s new board and relatively new management to restore trust in the 127-year-old firm, there is a group of shareholders who could not wait to dump the stock.
As soon as the market opened on Monday, there was a massive sell-off of Tongaat, with the stock falling as much as 67% in early trade. This is a stark reminder of how bad things have been at the company under the previous management, which stands accused of gross misrepresentation of financial information.
As soon as the agri-processing company, under the leadership of then-new CEO Gavin Hudson, realised the magnitude of the financial irregularities, it asked the JSE to suspend the shares in June 2019. Shareholders — who by then had seen the share price plummet by more than 70% since the beginning of 2019 — could not escape the burning house.
What does this say about the efforts to reinvigorate the group?
The huge slump in the company’s shares could be an indication that there is a group of shareholders that does not have the appetite for the turnaround strategy, which entails cost cutting and selling assets. It is important to note that the turnaround will also see Tongaat ask shareholders to buy new shares in a R4bn rights issue.
Clearly, there are investors who would rather take their money elsewhere.
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