CAPE TOWN – The resignation of Mark Barnes as the chief executive officer of the SA Post Office (Sapo) last week came as a wake-up call that sent shockwaves through South Africa’s corporate space.
I met Barnes many years ago, as a junior reporter, and my first interview with him was when he was appointed in 1991 as deputy managing director of Standard Merchant Bank. He was selected as a member of the Standard Bank Group’s executive committee until he resigned in November 1996 to take up the position of CEO of Capital Alliance Holdings Limited.
Capital Alliance has ultimately merged with promising young private equity start-up Brait, and Barnes once again took on the CEO role.
I interviewed Barnes when he took over as chairperson of the South African Futures Exchange (Safex) in 1996 from Rusell Loubser (the former president of the JSE) and later when Barnes was CEO of Brait, then when he formed Calajero (named after his children) and then when he founded Purple Capital.
Barnes has been described as a maverick, a brilliant business banker, a successful entrepreneur.
I agree with all. Barnes is passionate and controversial. If he were to be tested as a conventional CEO, Barnes would fail spectacularly.
He wears jeans and T-shirts yet he presents a proposal in Parliament that would even get Julius Malema and David Maynier excited.
He treats all with the same respect, from the president to the people who serve him his Carling Black Label at the Taj in Cape Town – and if the Taj doesn’t serve it – he will respectfully remind them that “this is South Africa, please sell South African beer. Please serve me a Zamalek”.
Barnes told me, before my time at Business Report (BR), that he wanted to help the Post Office.
Although I was curious I never doubted why.
I somehow knew he would fully integrate financial services into the Sapo infrastructure, as this was his passion.
Since I was appointed as BR executive editor, I did some research on the South African State Bank, something that Paul Mashatile, the treasury-general of the ANC, is passionate about.
I arranged a meeting and introduced Barnes and Mashatile and suggested the amalgamation of the assets of Sapo, the Development Bank of South Africa (DBSA), the Landbank, and some other state-owned assets. Barnes and Mashatile agreed to make it happen.
Let’s watch this space. I spoke to Barnes on Saturday… he will be around for some time.
Some quotes from Barnes:
- “I’m a PRAF – previously rich and famous.”
- “I’m a collector of things that reflect human endeavour and innovation.”
- “It’s amazing how differently people treat you on the roads in a Toyota. The cops were always looking for an excuse to pull over that prick in the Jag (Barnes owned a number of Jaguar cars once).”
- “I have to say I think my lowest moment was when I found myself having to go into a meeting and introduce myself as Mark Barnes and then have to try and sell myself on my past CV.”
- “I love to see other people making a success. The only thing I do regret is that we had such a powerful collection of talented and smart young people and didn’t make a success of it at the time.”
Media24 wrote some time ago: “Much like Discovery CEO Adrian Gore, Barnes comes across as one of those leaders who can convince you to buy into his vision on the strength of their personality and conviction that what they are doing will ultimately produce results. When you wrap up an interview with either of them there is the underlying sense that they can do anything they set their minds to.”
This brings me to the newly appointed joint CEO of Discovery, Francois Groepe.
Groepe not so long ago stepped down as deputy governor of the SA Reserve Bank’ and joined Discovery Bank as the fledgling lender’s deputy CEO. “The South African financial services landscape is undergoing significant structural change and Discovery Bank … will be playing a key role in this changing landscape … I look forward to being part of this exciting transition,” Groepe said in a statement, also on Thursday last week.
Business leaders I spoke to during the weekend described Groepe as arrogant. I agree to some extent. I met him in 2010 when he was the CEO of Naspers. He left “under a cloud” I was told by an insider at Naspers at the time. The Reserve Bank never explained, or responded to my question, “Why did Groepe resign?”.
The question is, did he resign, or did he leave under another cloud? If so, why?
Adding to the list of CEOs that resigned last week is the CEO of Africa’s biggest stock exchange, the JSE, Nicky Newton-King, who retired after eight years at the helm, at a time when foreign investors are ditching South African stocks in droves.
Media houses reported: “The JSE stated Newton-King is leaving and added that the JSE’s interim net profit after tax tanked 29 percent to R398m.
"Headline earnings were also down 29 percent.
"The last time the stock exchange’s earnings recorded a double-digit decline was in 2012 when full-year headline earnings fell R406.4m.
"Newton-King said the JSE recorded over R30bn in divestment by foreign investors in the first half of 2019.”
Newton-King said in an interview: “We are competing with many other emerging markets for international investors’ attention.
"We have to realise that if we don’t get our narrative right, if we don’t get growth going, we cannot compete."
She said local equities, in particular, were badly hit by the decline in international investor interest, with the value of trade a day declining by 11 percent to about R19 billion, compared with R22bn in 2018.
The JSE generates about 60 percent of its revenue from equity trading.
The JSE said bonds were one asset class that showed a good performance, with nominal trade value up 21 percent in the first six months. Profit growth was also negatively affected by the fact that the JSE’s total revenue decreased 8 percent to R1.08bn while operating costs increased by 11 percent to R670m.
The dire performance in the first half of 2019 follows the local stock market’s worst performance in a decade, which saw the all share index closing 11 percent lower in 2018. The last time the all share index recorded a worse performance than that was during the 2008 global financial crisis when it lost 25.72 percent.
Newton-King said while investors had been selling off emerging markets stocks for a while to find shelter in bonds and other asset classes, South Africa’s woes had been exacerbated by unique local challenges.