Tuesday, September 22, 2020

Sanlam chiefs finally join the BIFM fray

After a long process of soul-searching, Sanlam, a South African financial giant that owns a majority stake in BIHL (Botswana Insurance Holdings Limited) has decided to break the silence over the corporate governance controversy that has engulfed key executive and non-executive directors at their flagship insurance group listed with the Botswana Stock Exchange.

Sanlam is sending a high-powered delegation to Botswana as part of a relations-mending expedition.
Sanlam is intervening to allay concerns relating to the deal under which four directors of BIFM, which is the asset management arm of BIHL, formed a consortium and purchased shares for themselves under circumstances that were ferociously disputed by minority stockholders.

Under the deal, Sanlam sold 10 percent of BIFM to the consortium owned by BIHL Chairman (MacLean Letshwiti), BIFM Chief Executive (Victor Senye), Botswana Life Chief Executive (Regina Vaka) and a non-executive director responsible for investments at BIHL (Dr Keith Jefferies).

Industry insiders were this week saying they expect some kind of disciplinary action to be taken against some people involved in the deal.

This would be in the form of a reprimand, redeployment or outright sacking, said observers.

Sanlam Chief Executive Officer, Johan Van Zyl, is paying a rare visit to Botswana to address the BIFM saga and allay growing fears by minority shareholders that his company has been casual and carefree on what is essentially an important governance and ethical issue.

Van Zyl will be accompanied by Johan Van De Merwe, a senior Sanlam executive responsible for investment management.
“I can’t be sure what they [Sanlam executives] are going to say and do until they are here,” said BIFM head of Public Affairs, Tebogo Hirschfield.
The visit by Sanlam’s two leading executives comes barely two weeks after the deal, estimated to be P30 million and financed by Barclays Bank Botswana, had been reversed at a BIHL General Meeting.

As a result of the disquiet elicited by the deal, the Bank of Botswana cancelled their contract with BIFM, saying they were worried by possible instances of ethical impropriety.
Although the deal has since been reversed, Sanlam, which owns 54% of BIHL, is reported to be uneasy with the bad publicity the deal has so far attracted.

There are also fears that unless Sanlam weighs in as a majority shareholder, not to mention a key player in the South African financial market with immense governance responsibilities, there could be further backlashes with many other BIFM clients withdrawing their businesses and canceling contracts.

“There are genuine fears that with their influence and moral authority, the Bank of Botswana may actually have set the tone to the pension industry going forward,” said a financial analyst.

As a result with fears that other BIFM clients could take their cue from the all too powerful Bank of Botswana, Sanlam is not taking any chances.
The visit by the Group’s top executives is designed to relay clear signals to Botswana authorities that the issue is being addressed at the highest levels within the Group.

RELATED STORIES

Read this week's paper

The Telegraph September 23

Digital edition of The Telegraph, September 23, 2020.