Namibian investment company Trustco has a serious problem. Well, it actually has quite a few serious problems. But the immediate one is a dogged major shareholder that will relentlessly beat and bleat at the boardroom door while shareholders are left in limbo.
Unless Trustco, which holds interests in real estate, financial services and diamond mining, can quickly produce tangible evidence of its current viability, the boardroom assaults — there have been two to date — will no doubt continue.
Trustco, which has been worryingly scant on cash flow in its most recent reporting periods, might be considered a write-off for most casual market observers. But for a diversified Namibian investment company, the operating environment has shifted for the better. That economy is set for a strong performance, benefiting from firmer investment sentiment following promising discoveries in oil and gas, valuable lithium deposits, rare earth minerals and gold mining and green hydrogen projects.
The key Namibian Stock Exchange (NSX) index grew more than 22% for the two years between the start of 2024 and the end of 2025, with the bourse up another 13% year to date.
However, Trustco’s board finds itself in the invidious position of missing out on snagging this buoyant Namibian sentiment. It has been suspended on the JSE and NSX since early 2025 for what most shareholders take for granted — the delivery of timeously audited financial statements.
While the value of Trustco’s much-touted diamond interests, which it forked out a pretty penny for in scrip, will be severely flawed, the company’s real estate interests in and around Windhoek have most likely markedly appreciated. Obviously, this can’t be quantified until Trustco gets its accounting house in order.
The company last served shareholders with audited financial statements in mid-December 2023, when the annual report for the year ended August 2023 was published. An unaudited interim report to end February 2024 was released in May of that year … and then nothing more, as a curiously complicated audit process across South Africa and Namibia meant an ominous impasse sans financial reports.
At this point, Trustco shareholders are owed both the 2024 and 2025 audited financial numbers. By the end of this month there will be three outstanding sets of audited financials. By now a company lagging this badly in its financial reporting suite might easily have seen its listing terminated.
During the suspension period, Trustco has mulled delisting from the JSE and NSX and touted a scrip-funded buyout of the Van Rooyen family’s major shareholding in Trustco by a mysterious entity called Veldbridge (which dangled a possible Nasdaq listing). The delisting proposal still seems on the table, but the Veldbridge matter has gone quiet. The company also sold down its stake in diamond mining venture Meya Mining (pocketing a not insubstantial R460m), bought back a stake in unlisted subsidiary Legal Shield Holdings (LSH) and contemplated accessing $100m in hybrid capital.
The LSH transaction and hybrid capital facility were both initiated by Riskowitz Value Fund (RVF), a major shareholder in Trustco. Ironically, it is this very entity that has been beating on the boardroom door since last year. RVF believes there is considerable value to be salvaged at Trustco, notwithstanding the market marking the company’s shares down to just 30c at the time of suspension.
Last week RVF, headed by South Africa-born, US-based investor Sean Riskowitz, made a second attempt to usurp the Trustco board and bring in new directors, including retail sector heavyweight Grant Pattison, a former CEO of Edcon and Massmart.
While mainstream media narratives suggest the boardroom changes were voted down at a shareholder meeting on Monday, that is not strictly true. Trustco chair Raymond Heathcote ruled that the general meeting “was found not to be validly requisitioned as the ‘requisitionist’ was not found to be a member of Trustco Group Holdings”.
Strange but true. Even though Trustco’s last annual report reflects RVF as a significant shareholder, the share register purportedly had no record of Riskowitz Capital Management (RCM) as a shareholder. RCM’s legal representative argued that RVF and RCP were one and the same, to no avail.
Despite deeming the meeting invalid, Heathcote allowed voting on removing incumbent directors and appointing new directors — “for record purposes”. For the record clearly meant splashing the voting results on Sens the next day, despite several large shareholders being precluded from voting on a technicality.
In a press statement, Trustco founder and MD Quinton van Rooyen gloated: “Twice in six months, Riskowitz has asked Trustco’s shareholders to hand over this company. Twice the shareholders have answered. Riskowitz heard ‘no’ in February; it has heard ‘no’ again today.”
He contended: “There is no version of this campaign in which asking a third time produces a different answer. This board is going back to work — we’d suggest Riskowitz does the same.”
Riskowitz is, indeed, going back to work, and a third tilt at board changes is in the offing. He tells the FM: “Now that we know how they suppressed the will of the shareholders, we can amend to address it.”
Riskowitz played no part in the meeting, even though he requested an opportunity to address the gathering. Online participants could hear Riskowitz, but those present at the physical venue apparently could not. An online screenshot from Riskowitz proclaimed: “I formally object to not being allowed to speak at the meeting."
In a statement issued after the meeting, Riskowitz raised serious concern over the general meeting proceedings — pointing out that RCM, which owns 10.35% of Trustco, and RVF, which owns 24.1%, were not permitted to vote their shares.
Germinate, another significant Trustco shareholder, with a 7.16% stake, was also barred from voting. Riskowitz notes that collectively these shareholders represented 41.61% of Trustco’s issued shares.
Riskowitz points out that aside from its lengthy suspension on the JSE and NSX and its inability to publish audited financial statements, Trustco has received a R5m censure from the JSE for noncompliance with listing requirements and is in default on more than N$700m of debt. “Against this background, RCM believes Trustco shareholders should be entitled to exercise their fundamental right to vote on the composition and future direction of the company.”
But getting traction in last week’s meeting was difficult. Riskowitz pointed out that Van Rooyen defended Heathcote’s role as chair by arguing that it did not matter whether the chair was independent or biased because “he is the chair of the company”. He argues that this statement succinctly captures the governance problem at Trustco.
The nub of the issue is determining exactly what shares are entitled to vote. Heathcote ruled out swathes of shareholdings that were purportedly not reflected or identifiable on the Trustco share register.
Before the meeting, Germinate petitioned Trustco to respect its voting instructions over 85.4-million shares, pointing out that the “entitlement to exercise the voting rights … is not reasonably capable of dispute”. Germinate added that Trustco had itself confirmed the ownership and voting rights in a letter dated April 22 this year. The shares were, however, not allowed to vote at the meeting.
Then there is the critical case of 200-million Trustco shares issued recently to RVF as part of a R468m deal involving shifting back a minority stake in LSH. Trustco is now looking to unwind the deal — in essence reversing the share issue — arguing that RVF was using the scrip to trigger a takeover of the company, which the deal expressly forbids. How the deal gets reversed is anyone’s guess, having been officially consummated with shareholder approval in early 2025.
Determining and defining these key shareholdings beyond doubt will surely be the focus for RVF in the weeks ahead.
In the meantime, Riskowitz took exception to another large shareholder, the University of Notre Dame, abstaining from voting. He argued that this upheld the status quo. “They increase the hurdle that shareholders seeking change must overcome and thereby help protect the existing governance structure from reform.”
Riskowitz said that with Trustco counting those abstentions in the denominator, Notre Dame is not neutral at all. “Its voting position is being used mathematically to dilute the votes of shareholders seeking accountability and to make the removal of incumbent directors more difficult.”
Swinging around Notre Damemight be a quick win for Riskowitz. But establishing voting blocks beyond any reasonable doubt might prove far more difficult after watching the combative body language from Trustco’s directors at the meeting last week. It’s a good fight to take up, but it’s probably going to be a brutally long battle.
