The directors – Dr Duarte da Silva, Dr Craig Lyons and Professor Brian Armstrong – all tendered their immediate resignations and have been replaced by Veran Kathan in the role of independent non-executive
chairman, Michael Ronald Beamish as a non-executive director and Zak van der Merwe as executive director and chief commercial officer. 

TechCentral reports that the flurry of resignations followed heated boardroom debate regarding the company’s corporate strategy. 

Chief executive James Herbst told TechCentral that the disagreement involved, on the one hand, a body of shareholders holding more than 50% of the voting rights of the company – Herbst and certain non-executive directors, including the chairman of the audit committee, Dennis Gammie – and, on the other hand, the three non-executive directors who resigned. 

According to the Huge Group annual report for 2022, the company changed its status in March 2021 to that of an investment entity. This meant that, going forward, the group would no longer consolidate its subsidiaries but would rather carry such subsidiary investments at fair value, with subsequent changes in fair value being recognised in profit or loss. 

Visit Daily Maverick’s home page for more news, analysis and investigations

This change meant that Huge Group’s annual financial statements for the financial year ended 28 February 2022 were prepared on a materially different basis compared with those of previous years.

“We had a board meeting … which lasted just short of three hours, where lots of views were shared in a cordial and constructive manner. At no time did we have any idea that all three gentlemen would, right at the very end of the meeting, collectively tender their resignations. 

“These decisions came as a complete surprise and shock to the rest of us,” Herbst said. 

That statement falls a bit flat given how quickly the replacements were effected, although the CVs of the replacement directors do speak to a wealth of experience. 

Kathan is currently chairman of the Vodacom Group Pension Fund and Vodacom Group Provident Fund. Mike Beamish is the founder of Praesidium Capital Management, which is Huge Group’s largest shareholder. Zak van der Merwe is the former chief executive of Virgin Mobile South Africa, which later became Tethys Mobile. 

Huge Group announced a deal to acquire the remaining assets of Tethys Mobile in July this year and intends to use the company to offer a mobile virtual network operator platform to other companies. BM/DM