Old Mutual reluctant to free SA unit

LIFE insurer Old Mutual will not set its South African unit free. Chief executive Julian Roberts, faced with calls from South African shareholders that Old Mutual South Africa (Omsa) should be freed from the ‘yoke’ of the London-listed entity, said on Thursday that the company had to be seen as part of a larger group.

• ANN CROTTY

He told Business Report after the company’s annual meeting: ‘A group works together and the component parts of the group support each other. The US business is being turned around by the best executives available to the group, including SA executives.’
Roberts said South Africans should remember that in 2004 the Old Mutual group had stepped in to rescue Nedbank, when it was in need of a massive capital injection.
He vehemently countered the suggestion that the South African assets were being neglected by head office, whose attention was focused on more urgent issues elsewhere.
He would not be drawn on speculation about a separate listing for local business, noting that the board wanted to undertake further restructuring, but that given the current volatile market conditions they could not provide any details.
On the matter of his own tenure at the group Roberts, who was appointed chief executive eight months ago, said he had a target of five years. ‘If it gets extended by a few years, that would be fine.’
At the meeting, group chairman Christopher Collins chose not to deal with any of the many questions that had been sent by South African-based shareholders Theo Botha and Allan Greenblo.
Because there was no conference link between the London head office and South Africa, and because neither shareholder was able to get to London, they were prevented from raising their concerns at the meeting.
Collins said at the end of the meeting questions from South Africa would be dealt with on an individual basis with the shareholders concerned.
A key aspect of both sets of questions related to concerns that the group’s South African operations, which include wholly owned Omsa, 55 percent-owned Nedbank and 74 percent-owned Mutual & Federal were being hampered by the capital requirements of the group’s international operations, particularly in the US.
Shareholders at the meeting expressed concerns about the board’s decision not to pay a dividend, the poor performance of the share price and the lack of profit of US businesses.
Collins said ‘dividends will be resumed at the appropriate time’, adding that the share price ‘had broadly kept pace with its UK peers’. The board ‘fully accepts that we’ve had considerable difficulties in the US and Julian (Roberts) is working to address this’, he added.
Old Mutual shares rose 1,73 per cent to N$8,84 in Johannesburg. Traders were cheered by the firm saying it had bolstered its capital position.
-Business Report