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Resilient's board gives executives benefit of the doubt

Resilient's board said on Monday, 19 February, it was supporting the company's executive management regardless of allegations in recent reports about how they run assets and regardless of the recent sell-off in its shares.
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The board would wait for the independent review it announced on Friday and other investigations to be completed before considering any action against CEO Des de Beer, financial director Nick Hanekom and other top-line management.

"As far as the board is concerned, there are no reasons at this point to doubt that the executive team has performed their duties competently, honestly and in the best interest of the company's stakeholders.

"Of course, we are taking all allegations seriously and look forward to the conclusion of the review process," chairwoman Thembi Chagonda said.

She said the review would focus on share trading - as stated in Redefine's announcement on Friday - but it would not be narrowly constrained.

Shauket Fakie, former auditor-general of SA and former group chief business risk officer at MTN, is leading the review.

"The detailed scope is being prepared and the review will begin as soon as possible.

"The duration will be determined by Fakie's approach but, as indicated in the Sens announcement, all parties are aware of the need for the independent review to be carried out promptly," Chagonda said.

Resilient's market capitalisation has been hammered in the past month, with its shares being shorted by hedge funds and sold by institutional investors. Three negative reports were released into the market in the space of a few days. But its executive management's jobs are not necessarily on the line.

Garreth Elston, an analyst at Golden Section Capital, said he had not often seen executives walk in the country's listed property sector. "Off the top of my head I can't think of a South African property fund CEO that has been forced out.

"Mike Rodel resigned as Hyprop's CEO in 2011 over 'differences of opinion'. But I don't remember it occurring in South African property," he said.

"I have seen it in the US where in 2013 HCP, a US healthcare Reit, removed their chairman, president and CEO, all the same person at the time, but it is a very rare occurrence in property companies."

He said that with Resilient's independent review, plus the JSE and Financial Services Board investigations in progress, he did not think it would make sense to remove any management before the conclusion of these processes.

Source: Business Day
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