AVI appears locked in dispute with the black economic empowerment (BEE) partner of its fishing products subsidiary I&J Limited after it decided last month to replace its partner of 19 years with a new grouping that is unknown in the fishing sector and which is headed by I&J’s non-executive chairman, Professor Brian Figaji.
According to AVI, having been extended in 2012, 2018 and in 2022, the BEE transaction with Mainstreet 198 matured on July 1, 2023, having generated “significant value over 19 years”, including over R202 million in net cash to Main Street 198. In line with the agreement, AVI exercised its call option and acquired the shares held in I&J from Main Street, upon maturation of the transaction.
AVI has now entered into a new agreement with Twincitiesworld, which will own 18.75% of the issued share capital in I&J.
Main Street chairperson Mkhuseli Jack told Business Report that it had enjoyed a good relationship with AVI until June this year and AVI had also indicated to Mainstreet in May that it remained committed to the partnership to 2038, albeit at a lower BEE shareholding percentage in I&J of 18.75%.
“This sudden change is a very suspect and drastic turnaround… we had a legitimate expectation,” he said. It also ran counter to good corporate governance, he added. The new BEE partner, Twincitiesworld, was announced to the market by AVI on July 3.
Jack said Mainstreet had enquired at AVI about the fuller details of the beneficiaries of the new BEE consortium, which they had never heard of in the fishing industry, but was rebuffed.
AVI said in response to a question by Business Report that Twincitiesworld “is a 100% black-owned company that has historic links to I&J, strong community ties with a commitment to long-term social upliftment, and is well positioned to make an active contribution to the business. The company is a holding company for a consortium of individuals drawn from business and civil society with a 50% black female representation.”
It said Figaji, Twincitiesworld’s chairperson, was “a passionate community leader who had played an important role in the transformation of South Africa over the past 20 years as director of the Youth Development Trust, member of the Desmond Tutu Trust, country representative to Unesco in Paris, and as one of the architects of the initial blueprint for higher education transformation. Professor Figaji has also served on numerous corporate boards, including the I&J board, for many years.”
Figaji said: “Twincitiesworld is excited and privileged by the opportunity to be the B-BBEE partner in I&J Limited. The passion of our shareholders for the social upliftment and transformation of communities through support for community-based organisations will frame our approach as we embark on what will be an exciting and impactful partnership.”
I&J‘s employees own 6.25% of the company and with Twincitiesworld’s shareholding of 18.75%, 25% of the shares of I&J Limited is now held by previously disadvantaged shareholders.
BUSINESS REPORT