Report 68 Business Practices Committee5. The Meeting with the Committee on 28 May 1998 |
Botha, de Beer, Fennie and Van Wyk attended a meeting with the Committee on 28 May 1998. The representatives of GCI requested the Committee not to undertake a section 8(1)(a) investigation into the business practices of GCI and required a "compromise" in terms of section 9 of the Act. They submitted that "... it has become common cause that a harmful business practice came into existence".
The following statements were inter alia made in GCl's "Heads of Argument":
"Since the non-executive Directors' appointments, the company has begun to sail on a new course. Many processes were initiated to discontinue the harmful business practice. The following examples serve the purpose: (a) A new board was elected (b) Share trading were terminated and D-class shares were allocated (c) Mr. de Beer will submit financial developments, which have taken place during the past week. The absence to entertain it in this paper is thus explained".
"It is submitted with respect that the non-executive directors have been changing the company for the better. The other Directors and Company Secretary has followed suit. Firm leadership and informed leadership was needed, though, to enforce change.
| a) | Mr. Sadie was suspended as a Director. |
| b) | An investment policy was formulated and an investment committee is functioning. |
| c) | Marketing has been placed on the correct footing. The marketing plan contained (in an annexure) was adopted during the Executive meeting held on Tuesday 26 May 1998 at 16:45. Dr Fennie has played a major role in the formulation of this policy. |
| d) | A proper legal task group is in the becoming. Directors have also signed undertakings. The directors are all at present busy to submit their input concerning a Director's Code. |
| e) | Excess personnel were retrenched. |
It is submitted that these reports were implemented in less than a month. The will clearly exists to discontinue old practices".
"The phenomena of, and value underlining transparency and accountability have forced certain issues to the front. That did not happen in the past. For instance Mr. Sadie has become the prey of his own backdoor ways to do business. Other Directors have taken note. The company's past behaviour is not defendable, to say the least. It is, however, curable. It should be permitted to be given a chance. The evaluation of that chance, and the specific conditions to be met by the company and/or individual Directors/Officers are in the hands of the Committee. I submit that the circumstances have changed so much that a section 9 procedure should be implemented".
Section 9 of the Act makes provision for negotiations with any person or body, corporate or unincorporate, with a view to making an arrangement which in the opinion of the committee will ensure the discontinuance of a harmful business practice which exists or may come into existence and which is the subject to the investigation. The Committee accepted the explanations and arguments put forward by the representatives of GCI that the circumstances have changed and that a further investigation into the business practices of GCI was not called for. The Committee, however, resolved that the audited financial statements be made available to the Committee as soon as possible and that the issue of the 400 million shares of the directors be resolved to the satisfaction of the Committee. Botha said that the audited annual financial statements would be made available in two weeks to me.