Businesses fail all the time. Every hour of every day somewhere in the world there is a business that is going through difficult times, where owners and directors have to make impossible choices for their survival.
Every business is about making choices, and in the words of US Gen Norman Schwarzkopf, “Making a decision is the only way to move forward, even incorrect and bad decisions. A person who makes a thousand wrong decisions is better off than a person who makes no decisions at all, because such a person is much better prepared to move forward than the person who stagnates in paralysis of indecision.”
So the failure or success of any business has nothing to do with the biographical characteristics of the business owners but the decisions and choices those businesses had to make. A business that makes incorrect choices fails — those that are lucky enough to make good decisions are likely to see the next day.
According to a Business Insider SA piece published in February 2020, SA has lost 250 listed companies since 2000. As a result, in 2020 the number of companies on the JSE dwindled by more than 40% to levels last seen before 1994 during the end of apartheid.
There are a variety of reasons companies delist their shares and leave the JSE, the majority voluntary and some chiefly influenced by corporate takeovers. Most companies consider a listing or remain listed on the public exchange when they believe the stock market will offer them a better valuation than private players. This was true when Gemgrow Properties and Arrowhead, the two JSE-listed real estate investment trusts (Reits), consolidated to form a R16bn entity to strengthen their operations as they believed a larger entity is more resilient in weathering the storms and uncertain market conditions.
It is sheer coincidence that the businesses happen to be run by black people. Race is not a prerequisite for being listed as a Reit and should not be treated as such
The opposite happened, however, when Ingenuity Properties voluntarily delisted, citing its inability to generate sufficient liquidity and equity capital to fund its development pipeline, because the stock market was not offering a better valuation than could be achieved with private funds.
On the other hand, in 2019, IOL published a story entitled “Rising number of failing JSE companies makes SA increasingly uninvestable”, which told of private sector companies — including Steinhoff, EOH, Tongaat Hulett, Group 5, Omnia, Aspen, Mediclinic and Brait — that had seen their share prices collapse due to outright fraud, corporate governance failings, corruption or sheer incompetence.
It is well documented that companies that usually consider listing on the JSE need to grow big enough to move from private to public markets first. The opposite is also true for companies contemplating delisting because they believe private funds will grow their holdings enough to achieve levels of valuations that could sustain their business or allow them to settle outstanding debts.
Rebosis contemplating delisting is nothing out of the ordinary, for example; it is a choice any business would take in making decisions about its future prospects. This is the pure essence of business, to make decisions as the only way to move forward.
So what is so distasteful about the narrative around the story of Rebosis and Delta? Left unchecked, the story could lead people to believe the reason for Delta’s collapsing share price and Rebosis’s decision to consider delisting from the JSE is stereotypical notions of racialising failure. The Rebosis announcement followed recent delistings of Intu Properties and Grit Real Estate in the second half of 2020.
According to the company, Grit delisted to improve liquidity, save costs and allow access to cheaper equity and debt finance. Intu Properties, the UK’s largest shopping mall chain, unceremoniously delisted from both the JSE and London Stock Exchange when it lost billions of rand in shareholders’ investments, suffering conditions worse than Rebosis from a similar fate of being heavily exposed to UK retail property market.
Yet the headlines did not scream: “Brainchild of SA life assurance mogul Donald Gordon exits JSE”. Why? That would have been considered inappropriate and it would, in reality, have been both insensitive and inappropriate. The same applies when Atterbury disinvested from Ghana. It would have been wrong to label that incident “White Afrikaner company leaves Ghana”. No-one writes about “White-owned sugar company fraud”.
Rather, you get headlines such as “Steinhoff accounting fraud saga”, “EOH the biggest corporate scandal”, and so forth, because they reference cases of outright fraud, corruption, corporate governance failures or maladministration. One cannot help notice that when a similar fate befalls black-owned, black-managed or black-controlled entities headlines are quick to scream “Nomvete-founded property fund Delta’s JSE listing suspended with immediate effect” or “Two biggest black-run property firms might head for the JSE exit”.
When Massmart lost half its value in a single year, while Truworths dropped 40%, Shoprite lost almost a third and Mr Price fell 23% — businesses failed. They were not Indian businesses or Afrikaner businesses, nor were they white businesses. Businesses failed, period. The same applies to black businesses — because businesses fail all the time.
It is not black-run businesses that have exited the JSE, it is listed Reits that have exited. It is sheer coincidence that the businesses happen to be run by black people. Race is not a prerequisite for being listed as a Reit and should not be treated as such.
This narrative and style of reporting is not just distasteful, it is also highly misleading and irresponsible. It reinforces outdated stereotypical racial tropes that imagine the infallibility and superiority of certain races over others in leadership, business and commerce. This is not and should not be acceptable, and we should all actively strive to eradicate this type of discourse from our society and our media.
• Pitjeng chairs the SA Institute of Black Property Practitioners and is MD of TseboReal Asset Management.
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