Jacques Magliolo
That the head of a new black empowerment venture is=20 respected political figure Oscar Dhlomo lends it immediate=20 political credibility — and there are similarities to the=20 creation of Thebe.
Dhlomo will head a business consortium which will in turn=20 run Continental Investment Limited, an investment fund=20 worth R200-million, launched by Absa Merchant Bank this=20 week. Dhlomo’s consortium will own 50,5 percent of the=20 fund’s equity.
According to Absa, the consortium has already secured R100- million in initial capital. A similar amount “is to be=20 raised from institutional investors and members of the=20 public,” says an Absa spokesman.
Dhlomo adds: “Absa Merchant Bank will provide additional=20 expertise to supplement our ability to make meaningful=20 investments.” In other words, Dhlomo’s strategy is to=20 create an investment vehicle to buy shares in operating=20
“The consortium will acquire either a significant minority=20 shareholding or joint-venture control in high-growth=20 businesses which need a strong partner,” he says. No=20 details or names of possible partners are mentioned, but=20 Dhlomo says he thinks potential shareholders will be=20 pleased with the first investments.
The manner in which this fund has been announced — with=20 very little substantive information revealed to the market=20 — has led to mixed reaction from banking experts.
On the positive side, they say that the fund is been=20 supported by Absa, which surely has a large enough capital=20 base to support black empowerment ventures.
And there is no doubting Dhlomo’s influence in political=20 spheres, which will be a major advantage in this new South=20 Africa. Even in the volatile field of South African=20 politics, Dhlomo stands out as a rare breed.
After 12 years as secretary of the Inkatha Freedom Party he=20 resigned in 1991 and has since studiously avoided party=20 politics. Even in in the run-up to last year’s elections he=20 maintained his political neutrality — no mean feat.
Instead, he launched the Institute for Multi-Party=20 Democracy (IMPD), which aims to promote political tolerance=20 among all people of South Africa. Colleagues say Dhlomo is=20 a mild-mannered person, but also an astute businessman.
Banking analysts say Dhlomo’s political background, his=20 doctorate in education and his ability to inspire=20 confidence in business partners — as well as Absa’s=20 financial backing — make him a force to be reckoned with.=20 On the negative side, cynics are suspicious of the bank’s=20
Dholomo says: “It is anticipated the fund’s shares will be=20 listed on the Johannesburg Stock Exchange at an appropriate=20
The cynics believe Absa intends to take advantage of the=20 JSE’s forthcoming new main board sector, to be called=20 Redevelopment, which will have fewer listing requirements.=20 Companies that list in this sector will not have to provide=20 the exchange with a profit history and the R2-million=20 subscribed capital may also fall away.
It is also a JSE ploy, they say, to persuade institutions=20 to invest in companies which would otherwise have been=20 bypassed. With a total market capitalisation of over R800- million, the JSE has substantial influence in South Africa=20 and can certainly persuade institutions to invest in such=20
Others say that this new fund sounds like another Thebe=20 Investment Corporation. Indeed, when Thebe was formed, it=20 was also using a fund — the Bathu-Bathu Trust — to create=20 business opportunities for black empowerment. This was to=20 be done through joint ventures and selling shares in new=20 companies. They also intended to list “in the near future”,=20 and also refrained from providing details of “potential=20
Among Dhlomo’s board of directors is Gibson Thula, who is=20 also much in evidence as a director among Thebe’s host of=20