Foursight Holdings (FH) has applied for business rescue.
It said in a note to shareholders this morning that it is in financial distress and it appears there is prospect of its rescue.
FH is an intermediate holding company, within the 4Sight group, and “is heavily dependent on the cash flows in the form of dividends and management fees from its profitable subsidiary companies”.
In the note to shareholders, 4Sight says: “These flows of funds have not materialised, thus placing FH in financial distress.”
Shareholders were informed that FH had passed a resolution placing FH into business rescue in terms of section 129 of the Companies Act, 71 of 2008, because of its challenging financial position.
The recent drama at 4Sight behind the scenes has kept corporate South Africa enthralled. Not only is there tension within the company, but shareholder relations are also far from picture-perfect.
On Friday, a meeting of 4Sight shareholders was abruptly called off and moved to the first week of November.
The company issued a statement explaining that after initial discussions at the meeting “certain minority shareholders advised there was insufficient information in relation to all the proposals on which to make an informed decision”.
A day before the highly anticipated meeting, the chairman quit the listed company less than 24 hours after another director, the audit chairperson, resigned in a huff.
Chairman Dr Rama Sithanen, who was initially scheduled to leave by the end of the year, decided to leave immediately to pursue his ambitions in politics.
The company told shareholders: “Dr Sithanen will be stepping down due to his intention to re-enter politics in Mauritius. Dr Sithanen had previously advised the board of his intention to resign later in 2019 but the current situation within the group has led him to resign earlier than originally anticipated.”
The JSE-listed firm told shareholders his departure “is regrettable and he has served the board in an ethical, constructive and professional manner, providing sound guidance and wisdom”.
On Monday last week, chairman of the audit and risk committee Geoffrey Carter was the first to resign after “false accusations” were circulated in e-mails by executives, making the situation untenable.
Carter hit back at his detractors, saying in his view it equates to “Trumpism strategy – attack is the best form of defence and rule by division. As for the latest barrage of e-mails, it is becoming incomprehensible, apparently personal and diabolical.”
He continued: “As chairperson of the audit and risk committee, I am further of the view that my position is being compromised to a point of no return, where serious issues of financial irregularities have occurred, yet no consequences, except an all-out battle of egos and clash of characters.
“I have never experienced such hostility on any board of directors that I have been privileged to serve on – never. I am therefore unwilling to serve and provide my services under these circumstances.”
4Sight said Carter’s resignation was deeply regretted and he had served the board in an “ethical, constructive and professional manner from before the original listing of the company”.
The firm was listed in October 2017, at which time SA was its smallest revenue contributor, at only about 3% of revenue. In June 2018, former CEO Antonie van Rensburg told ITWeb this had grown to about 40% of revenue locally, and by 31 December 2018, this was up to almost 60%.
4Sight has been showing signs of growth and has made a lot of acquisitions since listing, which it said were to boost its capabilities in various industries.
In October 2017, it purchased AGE Technologies for R80 million and also announced the acquisition of BluESP Holdings for R54.8 million. In January 2018, it finalised the acquisition of Foursight South Africa and its subsidiaries, for R85.6 million.
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