MICHAEL AVERY: The Malta job: how to hollow out a company’s independence and value

There are inside deals, and then there is what just nearly happened at MAS Real Estate. 

A €291m sweetheart transaction that reeked of self-dealing and strategic capture was seconds from execution, quietly camouflaged under corporate boilerplate about “simplifying structures” and “enhancing liquidity”. If it weren’t for a few brave analysts, some agitated shareholders and a faint pulse of conscience somewhere in the system, it would’ve gone through. 

MAS was established in 2008, but the story begins — or rather festers — in 2016, when it entered a joint venture with Prime Kapital to gain exposure to East European developments. Fair enough. But what followed was a slow, deliberate hollowing out of independence, accountability and shareholder value. 

At that time Martin Slabbert was not yet CEO of MAS. He was on the other side of the table, as cofounder of Prime Kapital and lead negotiator of the joint venture that would later cause MAS so much pain. That’s important, because in November 2019 MAS entered into a second, pivotal transaction, acquiring Prime Kapital’s CEE property interests and its property management platform. As part of that deal Slabbert and fellow Prime Kapital founder Victor Semionov joined MAS as executive directors for three years. 

This wasn’t a passive handover. They were embedded in MAS to “oversee the repositioning”, but in reality it allowed them to institutionalise the structure they had helped create, control its levers from the inside and set up the conditions for future value extraction. 

By 2022 Slabbert and Semionov returned to Prime Kapital full-time. Their successor? Irina Grigore, a former Prime Kapital insider who rose swiftly from CFO to CEO of MAS. When the transaction was tabled in March 2025, it was essentially a deal constructed by people with deep ties to the seller, calling the shots at the buyer. Her gambit? In effect paying €96.6m more than “what the company is claiming to be” fair value, to her old employer for assets MAS had already bankrolled.

There has been a growing disquiet among minority shareholders about the related party dealings between MAS and Prime Kapital for many years. But from what I can gather from a few wandering albatrosses who landed on my balcony this week, this latest scheme seems to have been the final straw causing a more public outcry. A deal with the devil, paid in MAS shares.

The €291.7m transaction to buy out Prime Kapital’s 60% stake in the JV — at €96.6m more than fair value — was justified by the claim that it would allow MAS to gain control, simplify its structure and resume dividends. But the real story, buried beneath layers of technical jargon and obfuscation, is that the deal was laced with value leakage, hidden fees and structural conflicts. 

The payment would comprise MAS shares, giving Prime Kapital control of about 30% of the company at a deep discount to net asset value. MAS was even considering issuing unsecured vendor debt to Prime Kapital at 10%, while MAS faces a looming bond maturity in 2026 and liquidity issues it still hasn’t resolved, causing it to stop paying dividends. 

Oh, and did I mention that Prime Kapital had been silently collecting a 3.75% development fee on all projects for years, undisclosed in the company’s annual reports and, apparently, unnoticed by its auditors? 

Enter Nadine Bird, MAS’s CFO until June. At first, some speculated she had resigned in protest. That is until you realise her husband, Andrew, is a partner at Prime Kapital, the very party trying to stuff this deal down MAS shareholders’ throats.

Bird not only didn’t oppose the deal, she helped structure it. Her hands are ink-stained from the same pen used to draft the JV contracts. Her resignation is a footnote in a long-running saga of insiders moving between chairs in a game of governance musical chairs, in which the music only stops once shareholders realise they’re the ones without a seat. 

This deal should never have made it out of the boardroom. The fact that it did is an indictment of MAS’s nonexecutive directors, who appear to function more as ornamental placeholders than fiduciary gatekeepers. 

My albatrosses point to MAS’s complex structure and offshore domicile as keys to executing this unholy scheme. MAS is registered in Malta, operates in Romania and is listed on the JSE. This triumvirate of regulatory fragmentation allows for what can only be described as governance arbitrage. Malta’s rules don’t require mandatory offers at 35%. MAS’s own constitution grants the board unfettered discretion to exempt parties such as Prime Kapital from making one, and they did exactly that. 

In short, the rules were written to suit the players. And the referees were picked by the teams. By using MAS shares to fund the transaction, Prime Kapital, through its protected cell company structure, would have amassed just less than 35% of MAS. Thanks to a board-granted exemption, they wouldn’t have been obliged to make a mandatory offer to minorities.

This saga isn’t just about MAS. It’s about the cancer of complexity that eats away at listed property governance in SA. It’s about the culture of unaccountable executives executing transactions that benefit everyone except the people whose capital they are entrusted to steward. It’s about regulators asleep at the wheel. About shareholders with fatigued vigilance. About boards too comfortable to challenge and too compromised to care. And let’s not forget, pension money is wrapped up in this.

The MAS board should resign, or be removed. A forensic audit must be initiated to investigate the full extent of undisclosed related-party transactions and fees. The JSE and Financial Sector Conduct Authority must investigate how this deal got as far as it did. And auditors need to explain how a 3.75% margin on a €500m pipeline slipped through the cracks for years. 

That Prime Kapital walked away from the deal is not vindication. It’s damage control. And if nothing changes, expect the market to keep punishing the sector. You can dress it up in corporate speak all you like, but as long as the foxes run the hen house the market won’t buy the eggs. 

• Avery, a financial journalist and broadcaster, produces BDTV's ‘Business Watch’. Contact him at Badger@businesslive.co.za.