Basil Read CEO (54) throws in towel, firm struggles to attract replacement
One sometimes forgets that, behind the headlines, there are real flesh-and-blood people, with families and feelings just like the rest of us. When the construction industry came under fire for corrupt practices, the CEOs of construction companies had a very tough time of it. They were vilified by the press, abused by angry members of the public, and had to struggle enormously to rebuild people's faith in the industry. Basil Read CEO Marius Heyns, who announced his retirement on Thursday, is today able to reflect on those challenges with some equanimity. But listening to him talk about how hard those years were on him, personally, makes me feel some pity for the CEO of Pinnacle, who is just at the start of his baptism of fire. – FD
ALEC HOGG: Marius Heyns, Chief Executive of Basil Read advised his board of directors of his intention to retire. The company's board accepted the resignation, which comes into effect at the end of May. Joining us for more is the man himself who, only yesterday, was in the CNBC studios telling us about the turnaround at the company. Why didn't you tell us yesterday that you were going to leave?
MARIUS HEYNS: Alec, we didn't want to bring two shocks to the system. It was really our plan to announce only this morning, we didn't want to have two issues on the same day, and we felt that the results take first place. It's not something new – my resignation, or the fact that I'm retiring. Next month, I'll be 55. According to government, that's the retirement age. I will go and reflect on my situation, but to come back: the board knew about my decision, that I'd always indicated I won't stay for more than ten years. However, I think you should appreciate that for the board to try to find a new CEO in the last 12 months would have been a very difficult task. The industry went through an incredibly tough time and I've been heavily involved in resolving many issues with regard to contract claims, dealing through the Competition Commission issues over the last three years, and trying to calm clients. It was very rewarding how the team managed to claw our way back and to produce a respectable result.
ALEC HOGG: Yes, it's interesting. You talk about the Competition Commission. This is an area people are running away from. Roger Jardine from Aveng…I saw him the other evening. He's now the Primedia CEO. He looked very different – far less stressed. You're only 54.
MARIUS HEYNS: Yes.
ALEC HOGG: You've been taking quite a lot of punishment lately. It's a very young age to be stepping down.
MARIUS HEYNS: Thank you, although I am sometimes called 'uncle' by the younger people.
ALEC HOGG: Well, at least it's not 'oupa' yet.
MARIUS HEYNS: No.
ALEC HOGG: From that perspective, the emotional strain, which I'm sure you've been through in the past couple of months…
MARIUS HEYNS: We've received a lot of abuse as construction CEO's over the last years. It's easier to talk about it now, because after a while you become a little less sensitive to the issues. I think we've dealt with it so extensively, we spent a lot of time in the last couple of months to try to rebuild our reputation, and that's what we've been focusing on. I do believe we've done a great job, specifically with government, to try to get government's confidence back in the industry.
ALEC HOGG: Are they happy now to give business back to you?
MARIUS HEYNS: Yes, we do interact with many government leaders because obviously, government is an important part of our construction life. We need our government. I must say that government has been very mature whenever we've addressed issues with them.
ALEC HOGG: It's almost as though you've made mistakes, they've been cleaned off the table, and government now believes that the house is clean.
MARIUS HEYNS: Correct. They do believe us – that the house is clean. I can see it when I talk to government leaders. It's still a sensitive issue. It is something that people still would like to see if something happens. It's really in the interest of not only the country's economy, but job creation, too. There is a whole range of issues surrounding this issue.
ALEC HOGG: Well, you paid the price. You paid a big fine on the one hand, and on the other hand, you've taken quite a lot of stress. What about your family? One forgets about the other knock-on effects that come from forever being branded a crook in the mass media.
MARIUS HEYNS: Yes, definitely. Firstly, I think all the CEO's have taken huge strain over the last three years because of not knowing where this was going to end and there's still some uncertainty going around. Obviously, we as an industry, through our South African Federation of Civil Engineers are trying to deal with it through the body. I must admit that it does appear as though sanity is prevailing and we obviously, would like to move forward and get some form of engagement with government, and to try to come forward with some form of a restitution plan to rectify the negatives of the past. I do believe that government will be open to that.
ALEC HOGG: A restitution plan… Meaning…paying more money to…
MARIUS HEYNS: No, I don't think you're talking about more money. It's more in the form of kind, for example in the form of social responsibilities, in the form of training, in the form of addressing transformation, and trying to bring more black companies to the fore through enterprise development. I therefore believe that there's a huge positive spin on this.
ALEC HOGG: So something good could come out of it.
MARIUS HEYNS: From something bad, I believe, something very good will come.
ALEC HOGG: That's a positive way of approaching it, but what is not as positive is that you have an interim CEO who's now taking over from you. You call him Terence Desmond Hughes. What's his real name?
MARIUS HEYNS: His real name is Des.
ALEC HOGG: Des.
MARIUS HEYNS: Yes, he's an old stalwart. As a matter of fact, we had to pluck him out of retirement. If you look at Aveng, they've tried – for how long – eight or 12 months, they've been looking for a CEO. You must understand that it's very difficult to find a CEO because there's the perception that most management has been tainted (1) and (2) you have the problem that the experience has left the industry. I must tell you, the construction industry is not a sexy sector.
ALEC HOGG: Not now.
MARIUS HEYNS: It hasn't been for a long time. You won't find many people who actually want to come into it at such a critical time. The good news for me is that I've been focusing very strongly in the last 12 months on (1) transformation and (2) strengthening the balance sheet and reducing our debt. We've reduced our debt by nearly half-a-billion.
ALEC HOGG: I saw that. The numbers, as we covered yesterday, were very strong. Marius, it's good to see you. You're 54. My goodness, I'm sure you have another career waiting just around the corner.