Welkom Yizani investors are seeing red

There was wide spread frustration yesterday as the Naspers’ BBBEE investment scheme shares, Welkom Yizani, collapsed to a level below its seven years old subscription/entry price of R10.00 per share.

The further the share goes below R10.00, the bigger the capital loss for investors. If the situation remains like this for longer it will effectively translates into an opaque theorem translated as such: Black people have been made to pay Naspers a fee for the JSE listed media giant to derive empowerment credentials. Some investors have already sold at a price below R10 making this theorem a reality. The idea of Black Economic Empowerment (BEE), at least in its purest form, is for South African corporations who benefited from apartheid to pay ‘reparation of sort’ to black people and not the other way round.

On their second day of trading, the Welkom Yizani shares tanked to close at R9.00 having opened the day at R12.00. This is after the share had flirted with R20.00 in the early hours of the first trading day on Mondayshare price welkom

At R9.00 the Welkom Yizani shares are trading far below the book value of R50.00 indicated at inception in 2006. The investors are screaming “We was robbed”.

About 107 000 black people responded to the Welkom Yizani invitation and paid in R10 per share. These investors were effectively borrowed R40.00 by Naspers to earn a share valued at R50.00.

The idea was that the underlying asset, a Naspers subsidiary called Media24, would deliver value at a rate that will take care of the debt and live a respectable return for investors. The debt retirement must come via dividend flow and appreciation of the target asset. But realisation is supposed to come through the over the counter (OTC) market. The share is trading way below its net asset value. More or less the same circumstance has haunted more than 200000 investors who put their hard earned money into Sasol Inzalo BBBEE investment scheme.

A few other schemes of this nature, like MTN Zakhele, have created realisable value but with hefty donation from the sponsor of the deal. Naspers did intervene by writing off a portion of its loan in 2009 to shore up the Welkom Yizani scheme. It would seem this was not enough.

The lamentation by Welkom Yizani investors and general readers, submitted on this platform is taking a political tone which Naspers in particular cannot afford.

Here follows a taste of what readers many of which claim to be investors are saying:

JB: This is daylight robbery

R: Naspers; what a disappointment. Seven years of hoping; what a waste. Thank you for making us fools. We trusted your BEE promise.

DS: An absolute rip-off. It makes one wonder whether our money was ever intended for investment, or rather to pay off some huge debt (over seven years). BEE, what a joke! Or rather, are we taken for a ride because we are ‘BEE”!

N: This was really just a Big Big Hoax. First you had to deal with incompetent staff at the so called help desk. We had to fax documents over and over again. Now THIS! This is absolutely crazy. I will advise anybody else who is still considering to buy shares DONT!! You are wasting your time and money?

MS: What a disgrace! Why rob the poor? I took out a loan for 430 shares. My interest was doubled that amount.
Naspers and Welkom Yizani should face the music and pay the R50 per share to the investors or be arrested for fraud. I think all the investors should stop trading. This is not empowering but disempowering.

MM: I think the share price of R9 is scandalous and goes against the spirit of fairness to the black and disadvantaged people that the scheme was aimed at. This is sheer daylight robbery by the BBEEE fat cats. I am hoping somebody out there can intervene.

RL: They are stealing from the poor. What happened to the extra 2 years? Old people invested their savings but got nothing in return?

W: Stealing from the poor to give to the rich way to go welcome yizani. Seven years just to see how incompetent you are or maybe you are just damn smart in fooling trusting investors. I now own 400 worthless share certificates not even good enough to use as ….

news@ujuh.co.za

Comments from readers were submitted with full names. Ujuh.co.za resolved to abbreviate the names. We captured their comments in this article to showcase the mood out there but it was only fair to abbreviate the names because we did not speak to them for the purpose of quoting them in this article.

  • Government must intervene and order Naspers to pay in full, make good its promise, to deliver a R50 per share to us.

  • This is a traversty of justice. How are these gys slleping at night after making poor people go through such hell

  • And the whole world sees this. My opinion of Naspers is they are a reputable company with integrity. This is obvious daylight robbery! I did not expect to be made a fool like this. Too scared I’ll get even less compared to the R10.00 in 2006 I sold forcedly. It is NOT ON!!

  • I think Naspers used black investors to boost their BEEE credentials. To wait seven years, with no capital growth on your investment is robbery. Naspers benefited all the way to the bank.

  • why the company experienced growth and paid dividends over seven years makes sense.why the share price did not experience growth is beyond me.doesnt a company grow with its share price.

  • I AGREE WITH AISHA ABOVE ( http://www.ujuh.co.za/welkom-yizani-valuation-disappoint-on-first-trading-day/#comment-155375 ) ….. LETS ALL GET THE BALL ROLLING SOOOOONEST!!! BEFORE THEY WIPE THIS UNDER THE CARPET!! I suggest the Facebook group….. then we suggest on a meeting place and time… THEN TAKE IT FURTHER!!! WHO ALL AGREE WITH THIS??

  • It is a total disgrace, i was hoping to pay my child registration fees for the university, what now?????

  • I agree with u Randy. We shud not let them get away with this. This is fraud and this crooks must to b arrested. How can they make us fools like this. Really we really need to act against this tsotsi’s.

  • I got through to Welkom Yizani’s hopeless call centre about an hour ago…. i used the 0113215564 number, but now all of a sudden THATS unavailable aswell…….. PEOPLE WE NEED TO ACT ASAP!!!

  • UJUH must get a response from media 24. Investors were asked to wait for 7 years. If there was ever an exercise in futility and failure it must be welkom yizani. Their website indicated that independent valuations of the shares will be provided on their website. It turns out that only 2 of the 4 valuations were provided, viz one at approx R10.50 and the other at approx R12.50. We need to obtain reasons why the other 2 valuations were not provided.It is possible that they were valued below R5. Makes u think. Enough said from investors. We now need to hear from naspers and media 24 with regards to the initail valuation of R50 and how they intend to rectify the current position.

    bluepeter1

  • i agree that Naspers&Media24 must take responsibility for this chaos ‘cos they cannot blame us for a debt of of R330 Million they have to pay. this whole scenario of the yizani shares is unacceptable to us,the shareholders- something drastical must be done, immediately.

  • I think we need to Act on this ASAP and NOT allow them to get away with this…

  • Well done Naspers, do the right thing now and give everyone 1 NASPERS share for every 10 welkom yisani shares. If you are committed to Black Empowerment !!!

  • Guyz, I think we need to look at the bigger picture here. Understandably everyone is angry regaring the share price. Lets cut to the chase. 14.6 million shares were allocated to over 100 000 investors. The scheme was reported to be three times oversubscribed and Naspers was glad regarding the interest in the scheme as it upped their BEE status.That was the interest at the time in 2006, when PDI ‘s thought that they were being empowered. Naspers subsequently took a decision to extend the period for a further 2 years to allow investors to make a profit.Now keep in mind that over 100 000 investors have sat with the shares for 7 years. Right now, 7 years later after the lockin period, in the main , the shares are selling for R10 and on the first day of trade , towards the afternoon sold for R8/share.Shares are currently being traded at this price and monies are changing hands.Now how long must new and existing investors hold on to there shares until a profit can be realised. Is it another 7 years? Something doesnt add up. The silence from media 24 management and Naspers is now deafening.I hope u guyz see the bigger picture here. The sad thing is that we have not heard a single word from media 24 since the launch , expressing an opinion regarding the trading. Naspers must come out and explain what is the way going forward. If the custodians of the scheme are not prepared to take the moral high ground, then it begs the question , who must. Naspers must intervene almost immediately to save the scheme from further embarassment.

  • We only see things like this in the movies & not in our so called free RSA where we have all these nice terminology like BBBEEE. YIZANI must just do the right thing only, Pay the inverstors what is rightfully theirs.

  • It is strange that naspers brag about the share value of R1271;46 in Sunday Rapport 23 Feb and Welkom Yizani shares which is 15 Percent of the business is still trading for R10, what a disgrace ,I am upset that i bought Bee shares ,when black people get Bee shares its worth nothing,companies should stop offering Bee shares,their intention for black people to own shares is not genuine

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