MultiChoice Director Jim Volkwyn Steps Down Amid Shareholder Tensions

MultiChoice, one of Africa’s leading entertainment companies, is undergoing a significant shift as its longest-serving board member, Jim Volkwyn, steps down from his position. This announcement has come in the wake of rising tensions with key shareholders, particularly the Public Investment Corporation (PIC), which holds a substantial 15% stake in the company.

Jim Volkwyn, who has been a prominent figure within MultiChoice for over three decades, has decided not to seek re-election at the company’s upcoming annual general meeting on 28 August 2024. This decision is set against a backdrop of shareholder unrest, spearheaded by the PIC, which had threatened to oppose his re-election over concerns that it would violate corporate governance principles.

The Role of the PIC in the Decision

The PIC, known as the investment arm of the South African government and Africa’s largest asset manager, has been vocal in its criticism of Volkwyn’s continued role on the board. The main point of contention has been the R10 million in fees that Volkwyn received under a consultancy agreement with MultiChoice, an arrangement that was slated to run until 2028.

David Masondo, the PIC chairperson and deputy finance minister, emphasized the need for accountability within corporate structures, particularly when actions could undermine governance principles. “There have to be consequences where corporates are tone deaf and create structures that are used to undermine the principles of corporate governance,” Masondo stated, highlighting the severity of the situation.

MultiChoice’s Defense and Response

MultiChoice, however, has defended its decision to engage Volkwyn in a consultancy capacity, citing his extensive experience and deep understanding of the media industry. The company noted that such consultancy agreements are often necessary when specialized knowledge is required, particularly in niche sectors like pay-TV. The company also stressed that these agreements are always subject to review and can be terminated if deemed redundant.

Volkwyn’s long-standing relationship with MultiChoice, dating back to his tenure as CEO of Naspers’ video entertainment division, was seen as a valuable asset. His expertise in navigating macroeconomic challenges and shifting consumer behaviors was particularly highlighted by MultiChoice, which noted that Volkwyn regularly provided strategic advice to the group’s CEO, Calvo Mawela.

In a statement released on Tuesday, MultiChoice expressed its gratitude to Volkwyn, acknowledging his distinguished service to the company over the past 33 years. The company also sought to clarify any misconceptions regarding the legality and transparency of Volkwyn’s consultancy arrangements, stating that these were always fully disclosed to shareholders and compliant with corporate governance requirements.

A Broader Issue Within MultiChoice

Volkwyn’s departure is not an isolated incident within MultiChoice. Earlier this year, the company’s board chair, Elias Masilela, announced that consultancy fees paid to certain board members were under review, with a likelihood of being discontinued. This move was part of an effort to address concerns raised by shareholders about the nature of these agreements.

Among the board members who have benefitted from such contracts were former chair Imtiaz Patel and Kgomotso Moroka. Patel, in particular, was at the center of controversy earlier this year when his resignation as chairman was postponed to allow him to oversee acquisition negotiations with Groupe Canal+. This decision sparked internal dissent, with some questioning Masilela’s competence to handle the negotiations independently.

The Future of MultiChoice Governance

As MultiChoice navigates these turbulent waters, the focus now shifts to how the company will restructure its board and consultancy agreements in response to shareholder concerns. The departure of a key figure like Volkwyn marks the end of an era, but also the beginning of a critical period of introspection and potential reform within the company’s governance structures.