A special general meeting of 4Sight shareholders, at which the removal and election of a range of board directors was to be voted at, was called off prematurely on Friday, the company said in a statement.
The meeting was adjourned “following detailed discussions during which certain minority shareholders advised that there was insufficient information in relation to all the proposals on which to make an informed decision”.
The meeting has now been rescheduled for 6 November.
During Friday’s meeting, one of the directors of AccTech Systems, a major subsidiary of 4Sight, advised those present that in terms of the second earn-out for the year ending 31 December 2019 “AccTech was expected to achieve profit of around R40-million, well above the warranted R32-million profit”.
“It was not clear whether this statement related to pre-tax or post-tax profit or whether it included the results of Dynamics Africa Services, which is a wholly owned subsidiary of AccTech. This information has not been reviewed or audited by the company’s auditors but is deemed price sensitive by the 4Sight board and warrants disclosure to the market in order to put all shareholders into the same position in terms of potentially price-sensitive information.”
4Sight said it will hold a board meeting early next week, with a further announcement to be made “in due course”.
Ahead of Friday’s meeting, two directors resigned from 4Sight’s board.
Geoffrey Carter — chairman of 4Sight’s audit and risk committee — resigned on 7 October warning of “belligerent breaches in corporate governance, ill-disciplined financial transgressions and continuous disagreements” regarding the “interpretation to (sic) certain clauses in the sale of shares agreement”.
A day later, chairman Rama Sithanen resigned with immediate effect “due to his intention to re-enter politics in Mauritius”.
“Dr Sithanen had previously advised the board of his intention to resign later in 2019 but the current situation within the group has led him to resign earlier than originally anticipated,” 4Sight said.
The drama at the company appears to have started on or before 23 August, when 4Sight issued a statement informing shareholders that the board had received correspondence from a shareholder holding at least 5% of the voting rights in the company that required it to call a special meeting, the aim being to reconstitute the board.
The meeting was called to comply with a demand from shareholders Morne Swanepoel (who holds 14.6% of the company’s equity); Jaco Botha (12.4%); Mari-Louise Zitzke (11.6%); and Tertius Zitzke (3.1%). All four individuals had sold their companies to 4Sight in the 2018 financial year.
According to a 5 September statement, the shareholders wanted the meeting to vote on the removal Gary Lauryssen, Vincent Raseroka, Geoffrey Carter and Jason du Plessis as directors and the appointment of Tertius Zitzke, RP Dreyer and E van der Merwe to the board. In a later statement, an additional resolution was added, seeking the election of Botha — the 12.4% shareholders — as a director.
Then, on 19 September, 4Sight Holdings said it had received a “credible, non-binding expression of interest, with a request for exclusivity, for the acquisition of all the shares in 4Sight”. The board granted the unnamed bidder the exclusivity sought.
Carter said on Monday, in a 4Sight statement to shareholders, that he had resigned from the board “due to the untenable situation at a major subsidiary level, which has led to such subsidiary executives sending a variety of e-mails containing … false accusations and … looking to reconstitute the board as separately announced”.
The statement quoted Carter as saying: “The lengthy diatribe below (a reference to e-mails not published in the stock exchange notice) is delusional in content, incorrect in law and in my view equates to ‘Trumpism strategy’ (sic) — attack is the best form of defence and rule by division.
“As for the latest barrage of e-mails, it is becoming incomprehensible, apparently personal and diabolical. I feel deeply sorry and concerned that the board and specifically Vincent (Raseroka) and Gary (Lauryssen) are embroiled with various subsidiaries regarding belligerent breaches in corporate governance, ill-disciplined financial transgressions and continuous disagreements as to the interpretation to certain clauses in the sale of shares agreement.”
Carter continued: “This all raises pertinent statutory and regulatory questions in relation to the JSE Limited. As chairperson of the audit and risk committee, I am further of the view that my position is being compromised to a point of no return, where serious issues of financial irregularities have occurred, yet (there have been) no consequences, except an all-out battle of egos and clash of characters. I have never experienced such hostility on any board of directors that I have been privileged to serve on — never. I am therefore unwilling to serve and provide my services under these circumstances.” — © 2019 NewsCentral Media