FORMER Anglo American CEO, Cynthia Carroll, was a conspicuous absentee of the UK group’s centenary celebration held at Vergelegen, the historic wine farm that Anglo owns.
Several hundred guests were treated to music, speeches, and a cut of lamb in an event that, although bedecked beneath Vergelegen’s grandiose camphor trees, was nonetheless a demonstration of post-austerity moderation. Anglo was founded in 1917.
Attendees included former South African president, Thabo Mbeki as well as past Anglo grandees Tony Trahar, CEO from 2000 to 2007, and the Oppenheimers who have controversially liquidated their shares in Anglo over the last 10 years. E Oppenheimer & Son now holds 0.9% of the company.
Carroll, who was criticised by Trahar during her period in charge, hasn’t been ignored by Anglo, however. A source told Miningmx that she would be attending a centenary celebration which is to be held in London later this year.
Carroll, who was the first non-South African to lead Anglo, announced her resignation from the group in 2012 after six years at the helm. Initially, she was a new broom of note forging a strong relationship with then mines minister Susan Shabangu. She also introduced a fresh emphasis on safety although it eventually brought her into conflict with then Anglo Platinum CEO, Ralph Havenstein who subsequently resigned.
Carroll then clashed with a number of her executive team. Ian Cockerill, employed to head the group’s coal business left after a year reportedly after disagreeing with Carroll. The low of her Anglo career, however, was investing billions of dollars in Minas Rio which missed its production targets and was eventually impaired.
Mr. Agarwal
An industry figure who was also absent from the party, but who was nonetheless the subject of discussion was Carroll’s former boss Anil Agarwal, chairman of Vedanta.
His timing could not have been better: a hour before the centenary kicked off, the Indian businessman announced plans to buy £1.2bn to £1.5bn worth of shares boosting his personal stake, held in the family trust, Volcan Investments, to as much as 20% from the 12% he picked up in March this year.
According to UK takeover rules, a mandatory offer is not triggered until a 30% shareholding is reached. In any event, Agarwal’s team are insistent that the increase in the ownership of Anglo is not a precursor to a takeover. This raises the question as to the nature of Agarwal’s real motives?
“We cannot know what Agrawal is up to – perhaps it is just a seat on the board – but we cannot help but notice that a ‘bigger is better’ rationale goes against what rest of market has been doing in recent years,” said Investec Securities in a note. One analyst believes that Anglo is highly unlikely to invite Agarwal on to its board, if only because of the potential corporate governance abuses.
The obvious implication is that Agarwal is positioning himself, firstly believing that commodities are heading northwards, and secondly because he believes Anglo has a sound investment case. Anglo’s performance in the last 18 months supports this judgement.
But is he also positioning himself to benefit from possible corporate action involving Anglo? That is the burning question that is being posed.
Unfortunately, using his voting shares strategically would run into corporate governance issues once again. An analyst who asked not to be named said, however, that if Vedanta were to make a play for Anglo – deemed unlikely – it would have to pay a full price for Anglo. This would benefit Agarwal economically as the structure through which he bought his shares has side-stepped having to pay a premium for them.
