Boardroom Talk: M&R looks to have dodged a bullet in SA business’s graveyard called Australia

Two decades ago, while visiting Australia to assess a possible acquisition (we passed), I was invited by inimitable retailer Sean Summers to join a group of SA investment analysts scouting around the Pick n Pay operations. The group had recently acquired Franklins, an Australian lookalike for PnP, and a business for which Summers had high hopes..It ended poorly with Pick n Pay eventually calling time on its Australian adventure in 2010, selling Franklins to Metcash – a group created by the SA business of the same name. Metcash is still led by a Saffer, Doug Jones, whose CV includes executive roles at Massmart and SABMiller. It is the leading wholesale distribution and marketing company in Oz – one of the few SA companies to flourish there..Australia has been a graveyard for many South African businesses. Most notably WBHO which in February put its Aussie subsidiary Probuild into bankruptcy. Things could have turned out differently, but in early 2021 the Australian government blocked WBHO's A$230m sale of Probuild to the China State Construction Engineering Corporation because it regarded Chinese ownership as inappropriate for such a "strategic" asset..___STEADY_PAYWALL___.Murray & Roberts shareholders will be hoping for a very different outcome following yesterday's SENS announcement the group has reached agreement to sell its Australian subsidiary Clough to Italian multinational Webuild. The Milan-based company has a history of working with Clough on major projects, including two currently in operation..The sale, priced at A$350m (R4bn), will liquidate an intercompany loan to Clough and ensure M&R shareholders wont have to throw good money after bad. Clough urgently needs a capital injection. With the share price jumping almost 20% on the news, some think M&R has dodged a bullet. A rare positive Australian-related outcome for a SA company..More for you to read today: .Seizing a Russian superyacht is much more complicated than you think Billions in capital calls threaten to wreak havoc on global stocks, bondsUS quietly asks banks to keep some ties with RussiaDon't leave your heirs to handle your expat tax problems New Treasury regulation spells the end of compulsory BEE in state procurement Combating toxic work culture starts with conflict resolution.New Treasury regulation spells the end of compulsory BEE in state procurementFollowing a five-year court battle, Sakeliga is welcoming a new Treasury regulation for public procurement that completely omits BEE and local content requirements when tendering to do business with the state. Sakeliga CEO Piet le Roux says it marks the end of "compulsory BEE and local content requirements in state procurement. That's a very harmful arm of the octopus [state] that has now been cut off." In 2017 Sakeliga went to court to challenge regulations put out by then Finance Minister Pravin Gordhan making it possible for state entities to preemptively exclude bidders based on their BEE or local content status. In February this year, the ConCourt ultimately found the minister had no powers to prescribe to entities of the state what their preferential procurement policies should be. That discretion resides with entities themselves. But, while Treasury may no longer mandate, prescriptively, that BEE or local content requirements must be taken into account in a tender, a municipality or SOE could still insist on it – as long as the tender process doesn't fall foul of section 217 (1) of the Constitution. That particular section states: "When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective."

Boardroom Talk: M&R looks to have dodged a bullet in SA business’s graveyard called Australia

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