Delphine Govender on Naspers/Prosus china risks, large firms joining share swap party

Rockstar fund manager and one of South Africa’s most successful women entrepreneurs, Delphine Govender, joined BizNews founder Alec Hogg and 10x investments founder Steven Nathan in a discussion surrounding Naspers/Prosus controversial share swap. NinetyOne has jumped on the bandwagon against the executives of the two largest South African businesses despite its chief executive (Hendrik Du Toit) being on the board of both Naspers and Prosus. – Justin Rowe-Roberts

Delphine Govender on NinetyOne’s vote of disapproval against the Naspers/Prosus share swap:

To be honest I’m not surprised and the fact that some of the larger firms didn’t join the collaborative engagement (link attached for ease of reference) didn’t necessarily mean they didn’t agree with the approach or the content, it was just the path that they were on. We respected that process and the fact that wheels turn differently at different institutions. We had several of them involved at some point in the engagement.

On Bob Van Dijk not giving an inch to the asset manager’s demands: 

Bob (Van Dijk) and Basil (Sgourdos) have been very public saying that they’ve worked for well over a year on this transaction, they used north of ten different options that they had been working on and they settled on this one. I’m sure if we were in there shoes and we had to a bit of a roll-reversal it would be incredibly hard to now backtrack after investing all this time, energy, effort and advisory fees.

On the Chinese communist part coming for country’s tech titans, including Tencent:

The first point I think is that the risk you are highlighting is a risk that has been there for many years, it became more heightened say in the last five or so years as visibility and transparency over the whole variable interest entity (VIE) structure – in which the Tencent stake is held through the Hong Kong listing. In fact we (Perpetua investment managers) hadn’t been shareholders in Naspers for a while and one of the reasons was that we felt, ironically, the discount to which the share was trading relative to its net asset value (NAV) was not accounting sufficiently for these risks you take on when you invest in Naspers, notwithstanding the amazing underlying asset that Tencent is. You don’t actually own the underlying assets as a Naspers shareholder, you own it through this VIE structure whose legality has never been tested and the Chinese government could change their mind at any point in time.

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