Saturday, December 9, 2023

Turnstar board chair resigns ahead of fraught AGM

Turnstar Holdings board chairperson Patrick Balopi who is in the cross hairs of angry asset managers has resigned ahead of the company’s fraught annual general meeting.

Another board member, Pierre Bezuidenhout who was also in the hit list of asset managers who have an interest in Turnstar Holdings has also resigned.

Balopi and Bezuidenhout were the only remaining Turnstar Holdings non-executive independent board members from the 2017 board that presided over the controversial purchase of Palazzo Venezia building in Dubai.

The others Michelle Aldeman, Mokgadi Nteta and Peo Pillar have since resigned.  Aldeman was the first to resign amid the controversial Dubai deal, penning a strongly worded letter to the Turnstar Holdings Board Chairman, Patrick Balopi, citing discomfort with the board’s discharge of its fiduciary responsibilities.

Balopi and Bezuidenhout were likely to be voted out by asset managers who have stated publicly that they would not support the current board at the AGM.

Investigations by Desai Law Group confirmed Sunday Standard reports that Gulaam Abdoola failed to disclose to the board that he was a shareholder in Bucephalus Holdings, the Dubai company in which he convinced Turnstar Holdings to invest. Desai Law Group investigations also confirmed Sunday Standard reports that Turnstar Holdings and Gulaam Abdoola did not disclose the related party transaction to the Botswana Stock Exchange, breaching their listing requirements. ‘Mr Gulaam Abdoola failed to disclose that he was a shareholder in and director of Bucephalus Holdings making it a related party transaction. Details of related party transactions must be submitted to the BSE along with written confirmation that the company’s audit committee has reviewed the transaction – neither of these was done. Furthermore, the related party transaction was not disclosed to shareholders as required by the BSE listing requirements”, states the report by Desai Law Group.

The Desai Law Group also confirmed reports by the Sunday Standard that Turnstar Holdings hid its loses it Dubai from shareholders and did not issue a cautionary announcement as per BSE listing requirements. “The company knew the likelihood that Palazzo Venezia valuation would be written down when the 31st July 2021 statements were released but failed to note and declare the issue in the financial statements”, states the report by Desai Law Group. The report recommended that “the board is to self-disclose to the BSE the breaches by the company in relation to the BSE listing rules. The board is to discuss the implications of not disclosing the Palazzo Venezia valuation issue in the financial statements.”

Asset managers are however unhappy that Turnstar board members and Managing Director Gulaam Abdoola have been allowed to get away with murder.

An analysis report by one of the asset managers, a copy of which has been passed to the Sunday Standard states that, “We disagree with the conclusion of the legal report that largely absolves the Board of directors from their failure to provide the necessary oversight in relation to the two transactions. In our view, the Board of Directors is the ultimate custodian of Corporate Governance of a firm and should act as the focal point of corporate governance. For the firm. The Board is also charged with providing oversight. We find that the board failed to fulfil its mandate.

“We also disagree with the subsequent board decision not to sanction Mr Gulaam Abdoola and Mr Shiran  Puwimanasinghe, who were both instrumental in the failure that occurred with respect to the two transactions. We are of the view that the Company should sanction Mr Gulaam Abdoola and Mr Shiran Puwimanasinghe for their failure to perform their fiduciary responsibility to exercise adequate duty, care and diligence.

These views are believed to be shared across local asset management firms which are understood to be mobilizing to remove current board members and have both Abdoola and Puwimanasinghe subjected to disciplinary action.

This is expected to pit the fund managers against Abdoola at the upcoming AGM. Abdoola who is among Botswana’s Forbes five richest men is believed to have the support of Botswana’s Forbes richest man Satar Dada. Gulaam Abdoola owns 14% of Turnstar Holdings through his company GH Holdings, Satar Dada on the other hand owns 10,33% through his company Associated Investment and Development Corporation while fund managers control more than 60% of the company’s shares.


Read this week's paper