The Nasper’s Welkom Yizani BBBEE investment scheme has left multitudes in tears of financial distress.
“I am very disappointed with these shares,” wrote Maria Collen on ujuh.co.za comments. My husband is retired at sixty six years and I am unemployed and was depending on this investment to help us out.”
Another investors, Aby Leigh, said “I was hoping to pay my child registration fees for the university (in 2014). What now?”
The seven years old scheme opened for limited trading on Monday, the 9th of December 2013, and settled at about R10 per share at the end of the week. The 107 000 black people who invested in the scheme paid R10 per share at establishment of the scheme in 2006. This means their money has realised no capital gain in seven years. Some did sell below the entry price as the Welkom Yizani share did trade at levels below R10 during the course of the week.
On the first day of trading, Monday 9th December 2013, Welkom Yizani shares touched a high of R20 and then slipped to end the day at R12.00. The next day, on Tuesday, Welkom Yizani shares closed at R9.00 and did touch a low of R8.05 on the day. The shares ended the week at R10.00. Many Welkom Yizani investors are livid. Some are calling for regulatory intervention.
“Why are business people so heartless and without conscious,” said Collen. It is really sad to see that people do not have any moral and ethics anymore. The top executives walk away with millions. Why? We ordinary people are idiots in trusting people like you to consider our needs.”
Another investor Peter said “I think here is work for Thuli Madonsela (the Public Protector).”
“These people are disgusting, they shattered our dreams. They owe us an explanation on national Television,” said Peter.
Other investors were calling for the government and mainly the BBBEE Commission housed inside the department of trade and industry to intervene.
The trail of conversation about the performance of Welkom Yizani BBBEE scheme, hosted on ujuh.co.za, is heart wrenching in displaying shattered financial hopes of multitudes.
The Welkom Yizani BBBEE scheme is invested in a Naspers subsidiary called Media24. The scheme holds 15% of Media24, a business largely invested in South African print media assets.
When the scheme was established in 2006, the company said the Welkom Yizani shares sold to the black public under the guise of BBBEE were valued around R50 per share. Naspers loaned Welkom Yizani investors to the tune of R40 per share via a preference share structure. The idea was that the loan would be repaid through dividend flow from Media24 and enough value would be created to live considerable value for Welkom Yizani investors. Indeed, the scheme did produce some considerable dividend over the years, which was largely applied to servicing the loan and in 2009 Naspers wrote off apportion of its loan to the scheme and extended the term of the scheme by a further two years. As such the scheme may be in the money on paper with estimations placing net asset value around the R24.00 per share mark. This is largely meaningless for investors who are selling at R10 per share on the over the counter trading platform.
Comments from people who claim to be Welkom Yizani investors left on ujuh.co.za were submitted with full and presumably real names. Ujuh.co.za resolved to change these names and create fictitious 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.