/ 6 April 2011

State pension fund questions Freeworld board

South Africa’s state pension fund Public Investment Corporation (PIC) has expressed its concern about Freeworld Coatings’ handling of the takeover offer from Japan’s Kansai Paint, Business Report said on Wednesday.

Last Thursday, Freeworld adjourned its annual general meeting until April 28 to await approval from competition authorities.

The competition commission was expected to give a final decision on April 18.

“In whose interests were the recent decisions taken?” the PIC, which owns 13% of Freeworld, said in a statement sent to the newspaper in response to questions.

“The reasons given to the PIC by the chairman [Bobby Godsell] for the adjournment of the meeting seem to have gaps, to which we have sought clarification, including testing the decision against documented governance procedure,” the PIC said.

South Africa wants the country’s competition watchdog to block the hostile takeover of Freeworld. It is worried the takeover would cut competition, especially in the vehicle paint sector, and wanted competition authorities to impose conditions.

Element Investment Managers, which holds 17% of the company, said it was concerned that Godsell and director Moss Ngoasheng were “acting in the interests of the Freeworld executives at the expense of shareholders and in our opinion, are not acting in an independent and objective manner”.

The PIC, Kansai and Freeworld were not immediately available for comment. — Reuters