Window Dressing

The latest news from Harmony Gold is sure to get Jimmy (I saw a white face) Manyi frothing at the mouth again. A young black woman Financial Director is being replaced (albeit only on a six month contract) by a middle-aged white male.

Shock and Horror.

Let me outline the story.

A few months ago, then Harmony CEO, Bernard Swanepoel was offshore marketing a $350m bond in the States. During a presentation to some analysts, one of them picked up some anomaly in the numbers, so Bernard Swanepoel referred it back to source, presumably via his Financial Director, Nomfundo Qangule The bond-raising was subsequently cancelled, the reason given being conditions in the markets, but in reality it is rumoured, the figures in his presentation just didn’t make sense.

On the 6th August, Bernard Swanepoel, a highly respected CEO, with 12 years at the helm, suddenly resigned without giving reasons and the Harmony share price tanked, here and in the States.

And on Wednesday Financial Director, Nomfundo Qangule also quit, again without any reasons given. She leaves the company with a R2bn hole in the accounts and a share price 49% down in dollar terms. The anomaly in the numbers is being attributed to a new accounting package that was recently installed under her management.

Did she jump or was she pushed?

She has been replaced by the previous Financial Director, Frank Abbot, a highly respected Chartered Accountant with 24 years experience in the mining industry. His CV appears at the end of this entry.

Read a brilliant interview on Moneyweb here.

Now I am sure that Ms Qangule is a lovely and well-qualified young woman, but I can only feel really sorry for her being thrust into one of the most senior accounting positions in the world. (Harmony is the the fifth largest gold miner worldwide). Her previous experience (none of which is in the mining industry) includes a host of non-executive positions and a stint as a Credit Manager at Nedcor. Her CV also appears at the end of this entry.

I do not believe that she would have got this position in any other country in the World.

Before you start throwing your stones and shouting “racist”, let me say, that I too have B.Comm and CTA degrees. I have also passed the CA(SA) Board Exam. And guess what?, I make my living writing Accounting Software (thankfully not the package installed at Harmony). So I am not just a bitter armchair commentator. Regardless of her race and sex, Ms Qangule was clearly not qualified for the position into which she was thrust, and neither would I have been.

How many tens of thousands of floundering Black Diamonds are still out there? How many Billions of dollars of shareholders money is still going to be lost by pure incompetence? Do I blame these brave young souls? NO, I blame the South African Government for forcing the unsustainable, and highly-uncompetitive Affirmative Action Legislation upon us.

We are becoming the laughing stock of the International Investment Community, and this sentiment will reflect in our global competiveness, our exchange rate and our ability to attract foreign direct investment.”

Now I’m off to sell all of my shares.

Have a GREAT weekend.




Nomfundo Qangule (39)

Prior to joining Harmony, Nomfundo was the Executive Manager of Worldwide African Investment Holdings (Pty) Ltd (WAIH). She was one of the executive committee members of WAIH, responsible for providing strategic direction to the company. Other positions held by Nomfundo whilst at WAIH include: chairperson of the Board of Argil Holdings (Pty) Ltd, non-executive director of CS Holdings Limited where she served as a member of the Remuneration, Audit and Investment committees. In addition she was an Executive Committee member and non-executive Director of Negotiated Benefits Consultants (Pty) Ltd. She worked in the Corporate and International Division of Nedcor Bank Limited as a Credit Manager. Later she joined ABSA Corporate and Merchant Bank’s credit division. She is a qualified Chartered Accountant, a member of the Institute of Bankers and holds a certificate in financial markets from Acumen. Nomfundo obtained her B Comm degree from Rhodes University and completed her B Compt (Hons) CTA through Unisa.



Frank Abbott (51)

Mr. Abbott has over 24 years of experience in the mining industry and is currently the financial director of ARM and a non-executive director of Harmony. In 1992, he was appointed financial controller of Randgold Resources, a South African gold mining company, and was promoted to financial director of that company in October 1994. Until 1997, he was also a director of the gold mining companies Blyvooruitzicht, Buffelsfontein and Durban Roodepoort Deep and a non-executive director of Harmony, culminating in his appointment as financial director of Harmony in the same year. Mr. Abbott has a Bachelor of Commerce from the University of Pretoria, a Master of Business Leadership from the University of South Africa, and is a Chartered Accountant (South Africa).


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