Naspers chief executive, Koos Bekker, R7bn richer


Naspers chief executive Koos Bekker’s remuneration package, which is currently valued at more than R7-billion before tax for the past five years, has broken all previous pay records for JSE executives and is expected to hold the record for the foreseeable future.

Koos Bekker Naspers chief executive

Koos Bekker: Naspers Chief Executive

The 74 percent surge in the Naspers N share price over the past 12 months, combined with Bekker’s unique remuneration arrangement, has generated several billions of rands of potential profits for Bekker.

At a current price of R795, the 11.7 million shares that Bekker was awarded as remuneration for the five years to the end of March are worth R9.3bn. The cost to Bekker of the shares is just over R2bn.

This puts the value of his remuneration package significantly ahead of any other executive on the JSE, including executives of companies that have their primary listing on an international bourse.

Naspers’s annual report for financial 2013 reveals that 3.9 million shares were released to Bekker on March 31 this year and are being held in reserve for him in the company’s share incentive scheme. “This is the final tranche of his five-year contract entered into on April 1, 2008,” the Naspers remuneration report says.

In terms of his unique remuneration contract Bekker does not receive any salary, bonus, car scheme or medical or pension contributions from the company. Instead, in 2008 he was awarded 11.7 million shares, which vested in three annual tranches of 3.9 million at the end of years three, four and five.

The 11.7 million shares were awarded to Bekker at the ruling price at the beginning of his five-year contract, which was around R150. In addition, the price he has to pay is adjusted for inflation.

The first tranche, which was paid out at the end of financial 2011, cost Bekker R167 a share. The second tranche, at the end of financial 2012, cost Bekker R176 a share. The shares allocated to Bekker in March this year cost him R185 each.

This means that the total cost to Bekker for the 11.7 million shares was just over R2bn, compared with the current market value of those shares of R9.3bn. So, Bekker is currently showing a pretax profit of R7.2bn on his unique five-year remuneration package.

This is Bekker’s third five-year contract with Naspers.

In terms of the first contract, entered into in 1997, Bekker was allocated 3.3 million shares, which were released to him in three tranches ending in December 2003.

The dotcom collapse in 2001 highlighted the high-risk element of the arrangement and there was little value in the Naspers shares by the time they were awarded to Bekker.

In the second five-year contract, Bekker was allocated 4.4 million shares in 2003 at R21.40 a share. The shares were again released to Bekker in three tranches, with the price adjusted for inflation.

The steady upward trajectory of the share price during this five-year period meant that Bekker secured considerable profits.

The third contract, which has just expired, is by far the most valuable in terms of the number of shares awarded as well as the price appreciation.

The single most important factor in the surge in the Naspers share price in recent years is attributed to the performance of, and expectations for, China-based Tencent. Tencent is an acquisition that Bekker, who is regarded as having more guanxi (contacts) in China than most foreigners, championed back in 2004.

In addition to the 11.7 million shares, Bekker holds 4.7 million shares awarded to him in 2002 in terms of the rules of the Naspers share incentive trust. At the current share price, these 16.4 million shares are worth R13bn. The dividend payment on these shares will earn Bekker, and cost Naspers, R63 million a year.

Bekker appears to have sold the 7.7 million Naspers shares he was allocated in terms of the first two five-year contracts.

Supporters of Bekker’s remuneration contract argue that it is an appropriate arrangement given the critical entrepreneurial role he has played in building up the company.

Critics counter that the arrangement is unnecessarily generous and has contributed to the high-risk aspect of the share price.

The annual report does not indicate that Bekker has to hold onto the shares beyond the end of his five-year contract. They point to the fact that Naspers has a higher market capitalisation than Sasol, although its earnings-generating ability is significantly lower.

Remuneration consultants note that the arrangement has essentially de-linked Bekker from the group’s remuneration policies as set out by the remuneration committee. – IOL

Koos Bekker R7bn richer in 5 short years

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BRICS – For those who don’t know what it is


BRICS, originally “BRIC” before the inclusion of South Africa in 2010, is the title of an association of emerging national economies: Brazil, Russia, India, China and South Africa. With the possible exception of Russia, the BRICS members are all developing or newly industrialised countries, but they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs. As of 2013, the five BRICS countries represent almost 3 billion people, with a combined nominal GDP of US$14.8 trillion, and an estimated US$4 trillion in combined foreign reserves. Presently, South Africa holds the chair of the BRICS group.

In 2012, Hu Jintao, who at the time was President of China, described the BRICS countries as defenders and promoters of developing countries and a force for world peace. However, some analysts have highlighted potential divisions and weaknesses in the grouping, such as India and China’s disagreements over territorial issues, slowing economic growth rates, and disputes between the members over UN Security Council reform. India’s foreign policy in regards to BRICS is also heavily criticized by analysts in USINPAC.

BRICS

History

The foreign ministers of the initial four BRIC states (Brazil, Russia, India, and China) met in New York City in September 2006, beginning a series of high-level meetings. A full-scale diplomatic meeting was held in Yekaterinburg, Russia, on May 16, 2008.

First BRIC summit

The BRIC grouping’s first formal summit commenced in Yekaterinburg on June 16, 2009, with Luiz Inácio Lula da Silva, Dmitry Medvedev, Manmohan Singh, and Hu Jintao, the respective leaders of Brazil, Russia, India and China, all attending. The summit’s focus was on means of improving the global economic situation and reforming financial institutions, and discussed how the four countries could better co-operate in the future. There was further discussion of ways that developing countries, such as the BRIC members, could become more involved in global affairs.

In the aftermath of the Yekaterinburg summit, the BRIC nations announced the need for a new global reserve currency, which would have to be ‘diversified, stable and predictable’. Although the statement that was released did not directly criticise the perceived ‘dominance’ of the US dollar – something that Russia had criticised in the past – it did spark a fall in the value of the dollar against other major currencies.

Entry of South Africa

In 2010, South Africa began efforts to join the BRIC grouping, and the process for its formal admission began in August of that year. South Africa officially became a member nation on December 24, 2010, after being formally invited by the BRIC countries to join the group. The group was renamed BRICS – with the “S” standing for South Africa – to reflect the group’s expanded membership. In April 2011, the President of South Africa, Jacob Zuma, attended the 2011 BRICS summit in Sanya, China, as a full member.

Developments

The BRICS Forum, an independent international organisation encouraging commercial, political and cultural cooperation between the BRICS nations, was formed in 2011. In June 2012, the BRICS nations pledged $75 billion to boost the lending power of the International Monetary Fund (IMF). However, this loan was conditional on IMF voting reforms. In late March 2013, during the fifth BRICS summit in Durban, South Africa, the member countries agreed to create a global financial institution which would rival the western-dominated IMF.

Summits

The grouping has held annual summits since 2009, with member countries taking turns to host. Prior to South Africa’s admission, two BRIC summits were held, in 2009 and 2010. The first five-member BRICS summit was held in 2011. The most recent BRICS summit took place in Durban, South Africa, in March 2013.

brics-summits

Member countries

brics-economic-data

BRICS

South Africa re-opens rare earth mines


VANRHYNSDORP, South Africa — The detritus of South Africa’s mining past rises like a ghost town from the arid expanses of the Namaqualand region: the apartheid-era hostels for black workers, and a distance away, the houses for white managers. Razor wire and warning signs block the mine shaft entrance, and rusty old equipment is heaped nearby.

South Africa re-opens rare earth mines

The ruins of old buildings at Steenkampskraal mine, abandoned in 1963 and now being turned into a rare earths mine. PHOTO BY: Erin Conway-Smith

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But a half-century after the Steenkampskraal mine was abandoned, it is returning to life.

The old buildings are being torn down, and buried beneath impermeable clay because of their radioactivity. The mine shaft is being restored, and the entire site brought up to environmental code.

Steenkampskraal, abandoned in 1963 when demand for thorium went bust, is being refurbished because of the modern need for rare earth minerals — the minute particles used in smartphones, high-tech weaponry, electric cars and a host of other electronics.

Crucially, rare earths are being mined here to challenge China’s dominance of the supply of these strategically important yet obscure elements.

China controls about 95 percent of the world’s available supply of rare earth minerals, driving the interest in remote mine sites such as this one in South Africa. Mining companies are seeking new supplies that can quickly enter the market, and effectively dilute China’s ability to control rare earth minerals for political gain.

Last year China halted its rare earth exports to Japan in a spat over disputed islands in the East China Sea — a move that also made the United States nervous, and determined to reduce its reliance on Chinese rare earths.

Great Western Minerals Group Ltd., a small company based in Saskatoon, Canada, is one of the many firms vying to provide an option to China — and is betting that it is faster to refurbish an old mine like Steenkampskraal than to start from scratch.

The Canadian company bought the mine from the South African company Rare Earth Extraction Co. Ltd. (Rareco), and is aiming to begin production by January 1, 2013, with an expected 5,000 tons of rare earth oxide a year. Currently, about 120,000 tons annually enter the world market.

“The site is cleared and mine refurbishment is well under way, with completion of the shaft refurbishment by year end,” said Jim Engdahl, president and chief officer of Great Western, in an email.

Another company, Luxemburg-based Frontier Rare Earths, is also building a mine in the Namaqualand, a semi-desert region stretching up South Africa’s West Coast that is famous for bursting into flowers every spring. Frontier’s Zandkopsdrift mine is located 60 miles north of Steenkampskraal.

Experts point out that rare earth minerals aren’t actually rare — it is just the processing of them that can be costly and difficult.

To that end, Great Western has announced a tentative agreement to develop a rare earth separation plant in the nearby town of Vrendendal, in a joint venture with Chinese company Ganzhou Qiandong Rare Earth Group Ltd., which has 20 years of operational experience in processing rare earth oxides and metals.

At Steenkampskraal, another problem is dealing with the past: the highly radioactive waste left behind when the mine was abandoned by an Anglo American subsidiary in the 1960s.

Steenkampskraal is among the most radioactive contaminated sites in the world – approaching the levels of Chernobyl and Fukushima, according to Robbie Louw, former managing director of Rareco and now a consultant to Great Western.

Staff and visitors to the site must wear blue plastic booties over their shoes, and clip dosimeters to their clothing, to measure radiation exposure.

Steenkampskraal is being brought up to current environmental standards — and, Louw said, the site is even being “overdesigned” in case environmental regulations are tightened in future.

But despite the difficulty of processing rare earth oxides, and challenges such as the radiation at Steenkampskraal, analysts have warned of the danger of a glut of the minerals eventually hitting the market because of the many international projects currently under development.

Vincent Mora, project director at Steenkampskraal, said speed is essential: companies that are in first, fast track and open first will have a significant advantage.

South Africa re-opens rare earth mines – November 27, 2011

Chinese flooding South Africa


Without as much as a whisper the South African government allowed at least 400 000 Chinese to swamp the country during the past six years. Chinese migrants, mainly from the overpopulated Fujian province in China, have been shipped off to South Africa at an alarming rate. Spreading all over the country…

Even in the remotest parts, between 6000 and 12000 “Chinese shops” sprang up – indicating that the phenomenon is well-orchestrated by both China and South Africa.

Prof Colin McCarthy, retired from the University of Stellenbosch, first noted the “Chinese colonization”. Says Prof McCarthy: “All the evidence indicates that the project to set up such an extensive network of Chinese shops, all following the same pattern and targeting the same market, was well researched, well planned, well organized and well financed”.

The young, unemployed couples from Fujian province settled into the network – pushing up cheap Chinese plastics, products and clothing into a lucrative retail chain far bigger than Pick n Pay, Pep Stores or Edgars. And to make matters worse: most of the Chinese shops are not registered and do not pay any taxes in South Africa; not even import or export duties – in fact, China put its clothing exports to South Africa to R11,3 billion in 2010; while South Africa’s failing statistics put the Chinese clothing imports at only R6,7 billion! It means that in one single year R4,6 billion worth of Chinese clothing entered South Africa illegally.

A South African Revenue Services employee spilled the beans on a small Chinese shop in a rural area where, when raided by SARS, R1,2 million was found under the counter.

Janet Wilhelm of the HSRC observes: “It is amazing how so many people can enter a country seemingly unnoticed!” She quotes the SAPS Aliens Investigation Unit as saying “many Chinese travel to South Africa via Mbabane, Maputo and Maseru from where they enter South Africa with false identity documents by road”.

Patrick Chong, chairman of the Chinese Association of South Africa, says: “Many would enter on tourist or student visas then simply stay”.

Researchers of Noseweek followed the Chen family where one pioneer settled illegally in South Africa, spreading within four years to 172 members of the family scattered across Lesotho trading Chinese products.

What is even more mind-boggling and sinister is that the South African ANC government officially proclaimed Chinese as “honorary blacks”, making them exempt from affirmative action, quotas and Black Economic Empowerment.
The whole “Chinese” experiment has been carefully planned, criminally enhanced, and no doubt… vast sums of money are involved, lining the pockets of very influential South African politicians.

It is ironic that while populists like Malema and Shivangu walk about claiming “land and minerals for the South African people“, the ANC government has allowed at least 400 000 additional Indians and Pakistanis, at least 400 000 Chinese and at least 10 million illegals from Zimbabwe, Nigeria, Mozambique, Angola and now also Zambia into the country…

By Hannes Engelbrecht

SourceCHINESE FLOODING SOUTH AFRICA

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