A company called Community Investment Holdings (CIH) has emerged as a potential swing factor in the multibillion rands bidding war for JSE listed Pharmaceutical giant Adcock Ingram. Who is CIH and why do they matter?
CIH has partnered with Brian Joffe’s Bidvest to vie for 34.5% stake in Adcock Ingram. This bid stands against a R12.6bn takeover proposition by Chilean firm CFR Pharmaceuticals. CFR enjoys the support of Adcock Ingram board and its bid also claims BBBEE credentials via a promise to maintain Adcock Ingram existing empowerment formation, the Bophelo Scheme which hold about 13 percent of Adcock shares. The Bophelo Scheme features Bophelo Trust which represent Adcock’s employee empowerment initiative. The scheme also features an entity called Blue Falcon which represents interest of Adcock’s strategic BEE partners, Kagiso Strategic Investment II, the Mookodi Pharma Trust and the Kurisano Youth Development Trust.
And so Bidvest which has improved its initial offer for Adcock Ingram has brought in CIH to make the situation look like a BBBEE beauty contest amongst other factors.
Certainly Bidvest CEO, Brian Joffe, emphasized the weight of CIH. “Given CIH’s strong pharmaceutical credentials and Bidvest’s track record of value enhancing investments and strong empowerment credentials, we believe that the Consortium has the credentials to add value to Adcock, something which is clearly required”.
Joffe did add that Adcock’s existing BEE structures will remain in place as with the continued primary listing on the JSE. Joffe does need to touch on the shareholder or beneficiary base of CIH which is no where to be found in the flurry of statements made this week. This will enable us the public and role players to judge the substance behind CIH’s Level 1 BBBEE contributor status.
In the Bidvest statement issued on Monday CIH is described as an entity founded by Dr Anna Mokgokong and Joe Madungandaba.
Dr Mokgokong is a high profiled businesswoman and serves as CIH’s Group Executive Chairperson. Her profile posted on CIH website says she was born in Soweto, raised in Swaziland and holds degrees in Bachelor of Science (University of Botswana) and MBChB (Medunsa). She “has received international acclaim for her entrepreneurial ability.”
“As President of the South African Women Entrepreneurs Network (SAWEN), and the International Women’s Forum of South Africa (IWFSA), she is a much sought-after public speaker with a keen interest in community development and women empowerment. She has been inducted into the Leading Women Entrepreneurs of the World, an independent, international club of the world’s powerful and successful female entrepreneurs in 1998. In addition she is also the recipient of the prestigious SA Businesswoman of the Year Award 1999.”
She used her medical training as a springboard into business, however her scope of influence spans different industries. She sits on numerous boards of listed and unlisted companies locally and internationally.”
Dr Mokgokong has also served in academia and the public sector – having chaired the Council of the University of South Africa, and been appointed by President Thabo Mbeki to serve on the Commission for the Remuneration of Public Office Bearers, where she is the Deputy Chairperson.”
Mokgokong led the establishment of CIH in 1995 together with Madungandaba.
Madungadaba serves as CIH Group CEO. His profile in the CIH website reads thus: “Born and raised in Atteridgeville, Joe Madungandaba is an accountant by profession, and an astute business figure in the commercial world in South Africa. He sits on a number of boards of companies, both listed and unlisted, locally and internationally.”
He has studied Commerce at the University of the North (UNISA), Cranfield School of Management (UK) and Wharton Business School (USA). He is a fellow of the Institute of Commercial and Financial Accountants of Southern Africa.”
The Bidvest announcement present CIH as the largest fully compliant BEE company operating in South Africa’s pharmaceutical sector. “The company is 100% black-owned with operations in South Africa and sub-Saharan Africa. CIH has a proven track record holding interests in the healthcare, technology & telecommunication, logistics, mining and power and energy sectors.”
CIH looks like a company with more than two directors but they are not listed on its website.
Mokgokong is quoted saying “CIH’s participation in the pharmaceutical sector dates back as far as 1992 when CIH entered the pharmaceutical wholesale arena. It has since operated with the objective of growing and progressing these interests to establish a stronger national and African presence.”
The entry into Adcock provides a further platform off which to leverage to achieve these objectives. CIH is a Level 1 BEE contributor and, as regards its pharmaceutical interests in particular, has adopted a strategy of increasing efficiencies in local pharmaceutical production and job creation”.
As we have previously reported, it looks like BBBEE is going to matter in this Adcock race. True to form, there is lots of BBBEE talk.