THE behind-the-scenes drama preceding the shock suspension of Hosken Consolidated Investments (HCI) co-founder and chairman Marcel Golding earlier this week included a stymied attempt to buy out the company’s media assets, a costly dalliance in Ellies shares and hints at political interference in the e.tv news channel.

Court documents in Business Day’s possession confirm increasing hostility between Golding and the board — particularly CEO and co-founder Johnny Copelyn.

Golding said the deterioration in his relationship with Copelyn included differences on how to manage pressure from the South African Clothing and Textile Workers Union (Sactwu) on HCI and Sabido Productions and the fact that Sactwu "persistently" tried to influence e.tv news to further its agenda.

Golding’s documents show stark differences in perceptions between HCI director Yunis Shaik and e.tv CEO Bronwyn Keene-Young on an undertaking to cover infrastructure events at the urging of Economic Development Minister Ebrahim Patel.

Shaik suggested e.tv had given an undertaking to Patel to "give due coverage to infrastructure programmes being unveiled by the government in the evening news".

One of Shaik’s missives to Golding read: "I got a call from Minister Patel today. He says that this day President (Jacob) Zuma opened a new dam. The building of dams is a big issue and has a big impact on the country for (the) supply of water, etc. He wants for us to cover it tonight. They have sent us the feed and want for us to use it. As this is a big story, it might be a good lead story of the day. Please raise with the news desk."

Golding also said to Ms Keene-Young in an e-mail: "The undertaking to give more attention to the news was also to the president and other ministers as part of our lobbying for support on the STB (set-top box) programme".

Golding and Copelyn resurrected HCI — then a cash shell — in the late 1990s, and have been hugely successful in building shareholder value with smart investments in gaming, media, transport and mining. But it seems clear that relations on the HCI board were fragile, and court documents show the board had been pushing for Golding’s resignation as far back as August.

Attaining his resignation, however, hinged on his buying control of HCI’s media assets — which are held under Sabido and include free-to-air TV channel e.tv.

Court documents show Golding’s suspension from the HCI board for alleged gross misconduct earlier this week was, however, related to a share-buying transaction involving electronic equipment distributor Ellies.

Golding had already pledged 5-million HCI shares for such a transaction, and had allegedly approached another major Sabido shareholder — Remgro — for support. The proposed buyout was, however, scuppered when Sactwu Investments, the union’s investment arm and a major shareholder in HCI, declined to support Golding’s endeavours.

Court documents show Golding’s suspension from the HCI board for alleged gross misconduct earlier this week was, however, related to a share-buying transaction involving electronic equipment distributor Ellies.

Between March and July Golding bought about 6-million Ellies shares at an average price of about 400c a share on the open market, instructing stockbrokers Investec Securities to accumulate the shares in a nominee account on behalf of Sabido.

The documents showed HCI and Sabido — now part of JSE-listed Seardel — had at one point considered buying a strategic 25% stake in Ellies, which distributes the box sets for Sabido’s OpenView terrestrial channel.

In court papers, Golding stressed that although a nominee account was used to purchase the Ellies shares, the stock was acquired for Sabido and not in a personal capacity.

A roughly 5% stake was acquired in Ellies, which he contended strengthened Sabido’s hand "in more serious engagement with Ellies".

Subsequently the Ellies share price had collapsed to closer to 100c after the company’s directors indicated the need for a rights issue. Golding indicated to the board that he would "take the pain" on the shares, and even volunteered to donate them to a philanthropic trust.

HCI, though, maintains that Golding willfully concealed the transaction from the boards of HCI and Sabido. It also believes he failed to present a corporate opportunity for consideration, prejudiced the consideration for the corporate opportunity and acted in a manner that resulted in a conflict of interest.

HCI executives did not return calls on Thursday. Copelyn said via e-mail: "I don’t have anything to say about Marcel’s matter; other than how saddened I am by it. I am unwilling to be drawn on its details ahead of due processes."

Responding in court papers to the allegations of improper conduct, Golding said he had assumed that the Ellies matter was closed. "I must also say that I’m disappointed that Johnny (Copelyn) is now proposing a disciplinary inquiry two months after he became aware of the matter, and in circumstances when all other attempts to compel me to resign from HCI and Sabido have failed."

See more articles