Inside the Trustco investor putsch 

Trustco has been one of the odder of oddities to grace the JSE over the past 15 years. The Namibian company, which listed on the exchange in 2009 under enigmatic founder and CEO Quinton van Rooyen, saw its shares dribble along then soar, hitting a peak of R16 in January 2019 before thudding back to earth again. The company last traded at 30c a share before its stock was suspended in January.

It has been censured by the JSE on three separate occasions. The first time was in 2020, when the exchange argued that Trustco, a company listed in South Africa, Namibia and New York, had published 2019 accounts that didn’t properly reflect what was happening inside the firm. And now, no-one knows what’s happening at all, given that it has failed to produce financial statements since February 2024. 

It’s no wonder that one of its biggest shareholders – the Riskowitz Value Fund, which owns 45% of the stock – has proposed a clean-out of the board. Its suggested replacements include names like Grant Pattison, the former Massmart CEO. Currency spoke to RVF founder Sean Riskowitz about the move.  

I thought you had a good relationship with Quinton van Rooyen? 

I’m a shareholder in the company just like anybody else and I need to protect [our] investment. The way the company has been managed and the situation it’s in is fundamentally unacceptable. So as any investor does at the beginning of a relationship, you try to start on good terms and we did have a good relationship for quite a while. But we’re now in a position to make this change and I think this change is overwhelmingly supported by other shareholders and creditors. 

Do you have any insight as to why Trustco hasn’t published financials and done what it ought to have its listing reinstated?

It’s hard to say because I haven’t been given information. The public reason why they’ve said the financials are late is that they allege the JSE changed the rules about auditors. The story they tell is that the JSE [wants] firms to have three partners, and the audit firm they use in Namibia only has two partners. Now, for me, that’s a silly reason because if you’re stuck in that quagmire, just change auditors. I think it’s part of a plan to list on the Nasdaq and to short-cut out of [the JSE listing].  

Financial Mail editor Marc Hasenfuss has written about “mystery Cayman Islands-based investor VeldBridge”, which is looking to buy the Van Rooyen family’s shares. Who are they? 

Trustco has struggled with JSE compliance for a long time and instead of complying they decided to switch the listing from the JSE to the Nasdaq, where they believe the Trustco story will be more well received.

One of the ways in which they could implement the transaction was to delist from the JSE and list through VeldBridge – which is nothing more than a company directed by Quinton van Rooyen to switch out the shareholding of himself and other shareholders, as well as claims they may have on the company, to an entity in the Cayman Islands.

The structure that was offered was not attractive for us or any Trustco shareholder other than Van Rooyen, in my opinion. So we are stuck where we are now, where he’s running the company for his own benefit. It’s a clever way for Van Rooyen to benefit himself at the expense of Trustco shareholders, and circumvent his obligations and responsibilities insofar as complying with the JSE’s listings requirements are concerned. 

What’s Trustco’s response been since you announced your plan?

This process is similar to how it works in the South African Companies Act, but obviously this is a Namibian company. 

Under Section 189 of the Namibian Companies Act, any shareholder who owns more than 5% of the shares can call a meeting and propose at that meeting any resolutions that they see fit, including the removal of all the directors and the appointment of new directors.

That process is set out in the act. So Trustco has 14 days from the requisition to send out notice of the meeting, and the meeting date must be scheduled 21-35 days from the date of the notice. 

However, what Trustco is trying to insinuate at the moment is that they have their own internal process that must be complied with before any member of the board is elected. Obviously that’s designed to impair our proposal – and it’s unlawful. If they don’t call the meeting then the shareholders, per the Companies Act, have the right to call it themselves.

So if we haven’t got notice of a meeting by December 12, we will call the meeting ourselves and we will be allowed to remove the directors and elect a new director slate, and have that new board take over the affairs of the company. 

I just want to clarify: the candidates such as Grant Pattison are obviously reputable fellows, and they are to be elected by the shareholders of the company.

What Trustco is trying to do is say: “Well, you need to pass all these tests,” and that is not required by the Companies Act.  

It sounds like this meeting is going ahead, according to the law?  

The meeting is going ahead – whether it’s held by the company or by the shareholders. 

Trustco has always been a weird beast and there have been constant question marks over the value of its assets. Is there value there? 

What the company owns is quite easily identified from the annual reports and from doing some research. The much bigger question is the value of these assets.

But I’ll take you back to why we were attracted to the company in the first place … In 2009 they listed on the JSE at 80c, and soon thereafter they were at 30c. As a value investor I looked at the company and saw that their land assets in Namibia were particularly attractive. Windhoek is a basin, and can only expand north. Trustco has two properties: an industrial and residential property, and the economics are highly attractive. They’re now being sold at high values to property buyers and they generate cash flows. So those are good, fairly straightforward assets. 

In addition, they had insurance businesses providing mostly credit life insurance. And those businesses, on a margin perspective, were actually more profitable than Outsurance. So we bought shares at 30c and they went all the way to R16 at the peak in 2016. It was a hugely successful investment.

Thereafter, questions started to arise about the value of the properties and how the company was accounting for [its assets]. Then we went into the Covid period, and the Namibian economy itself went through almost 20 quarters of negative growth.

And then they did a mining deal [Trustco sold a chunk of its shareholding in Sierra Leone-based diamond venture Meya Mining]. They had a big international mining company ready to invest and then the Ukraine-Russia war happened and the diamond market tanked … 

I’m very comfortable that the assets have value, but what I really don’t know – as with the rest of its shareholders – is what the value is, given that we’ve had no information since February 2024. I wouldn’t be trying to protect my interests if I didn’t think there was anything here. I think there are good assets, they’ve just been mismanaged, and the governance has been completely woeful. So it’s time for a change. 

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_{Top image: Sean Riskowitz. Picture: supplied.}