The board of directors of JSE-listed CS Holdings has released the results of an internal investigation, conducted by shareholders Reunert and Worldwide Africa Investment Holdings.
The investigation related to allegations that appeared in certain media and centred around questions about the financial treatment of a transaction (the purchase and sale of rights to EDD) concluded in December 2002 and a possible conflict of interest pertaining to this and other transactions.
The board has come to the conclusion that there was no fraud or any form of criminal activity or negligence on the part of management or of the CEO of CS Holdings, Annette van der Laan.
The board of directors did, however, conclude that there was an error of judgment on the part of the management of CS Holdings at the time of the finalisation of the December 2002 interim results.
The report also concludes that there was no conflict of interest related to the EDD transaction, or any other transactions handled by Hans van der Laan and his company, Havadel. The board was aware of the relationship between Hans van der Laan and Annette van der Laan (that of ex-spouses) and had approved the rendering of services and the accompanying advisory services contract provided by Havadel. Van der Laan did not receive any remuneration or commission for his role in the EDD purchase or sale, other than payments due in terms of his advisory services contract.
Today`s investigation findings also give the board of directors the opportunity to announce that Annette van der Laan has tendered her resignation as CEO of CS Holdings. They said that it was with great regret, but in the best interests of the organisation, that the board has accepted her resignation, with the caveat that they wished to express their great gratitude to one of the founders of the company, for her untiring effort and drive over the years.
"It is necessary as the CEO at the time of the transaction for me to take responsibility for the management decisions made," says Annette van der Laan. "Nothing is different from where we were in August 2003, when our audit committee and board had all the appropriate information before them."
Says Thuli Zuma, chairman of the CS Holdings Board: "Dave Vink, a long-standing member of the CS Holdings executive management team, and board member, will be taking on the role of acting-CEO for the foreseeable future.
"We believe that we have a strong management team in place, and as highlighted in our interim results - with the majority of all loans and vendor payments being made, we also anticipate our cash flow situation to improve significantly during the next six-month period. This leaves us in a strong, and some may say, enviable position when it comes to the value and quality service that we can provide to our clients. It is business as usual for CS Holdings, with a few changes. Those being a focus on good corporate governance and more active participation by Reunert and WAIH. The group remains dedicated to selling its specialised and integrated solutions to a strategic client base and will be focusing on organic growth through its key accounts," says Zuma.
In conclusion, Van der Laan said: "On a personal note, I would like to thank all those I have worked with through my years at CS Holdings. We have had both tough and wonderful times. To our staff, thank you for your ongoing support. We have built an excellent company, from a small concern to a half a billion rand one, and I have all the confidence in the executive management and staff that they will be able to take it to the next level."
The transition at CS Holdings will be a considered one, with Annette van der Laan remaining at the company for a week or so, until a proper handover is complete, to provide both support and continuity for staff, customers and business partners.
Senior Reunert executive, and CS Holdings Board member, Pat Gallagher, will be on hand to assist acting CEO Dave Vink with the transition and to ensure continuity for the business and its customers.
In the past nine months, CS Holdings has initiated decisive action and embarked on a streamlining exercise which has started to reflect a positive effect on its financial performance. With Vink being highly involved in the process, as well as in the strategic direction and strategy of the company, he is well positioned to continue with this.
Share
CS Holdings provides business and IT solutions that enable sustainable competitive advantage for clients through reduced cost, managed risk, improved efficiency and added effectiveness. This is done by means of integrated solutions that incorporate the complete value chain of strategy formulation, best practice business processes, appropriate information technology and optimised people effectiveness.
CS Holdings is a leading BEE company for the ICT sector, and have received the prestigious Empowerdex A rating in 2003.