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The Sun King gets a licence to gild his ... Gold plummets as Switzerland jumps ship... Stals comes out smelling of rose... Stealing the show with icons of the mode... British investors give SA airship compan... |
The Sun King gets a licence to gild his empire
A new book seeks to unveil the secrets of how Sol Kerzner amassed his substantial personal fortune, writes MARCIA KLEIN
"Across four continents, Sol's rays encompass a Byzantine maze of stock-exchange listed and unlisted vehicles, private and public companies, interlocking shareholdings and directorships, management fee conduits and family trusts at various stages within a labyrinth of control pyramids." This makes it impossible for an outsider to detect his net worth, says Greenblo. It is impossible to ascertain dividend income, management and consultancy fees, restraint of trade payments and the value of his properties. Kerzner has also made use of offshore tax havens and the accounts of his privately held World Leisure group are not available for public scrutiny, he says. But Greenblo offers examples of some of his windfalls. "Sol's consistent approach has been not to risk his own money but to take slices of the action as it progressed," he says. In 1979 he had 25 000 SA Breweries shares, worth R75 000 that year, but their value today would be R3.2-million. When Southern Sun listed in 1979, he was issued 1.2-million shares at 40c each, costing him R480 000 and appreciating to R7.7-million when he left the company in 1983. Had he then invested this money in a blue chip portfolio, the current value would be more than R120-million. The 1983 Southern Sun annual report showed him to be the holder of 6.5-million Southern Sun shares, which would have given him dividends of R2.6-million that year alone. In the 1983 Southern Sun restructure, the Kerzner group sold 5.5-million shares to SA Breweries for R34.65-million. Kerzner then bought 51% of the new company (what was to become Kersaf) owning the casino hotels, including Sun City, for R30.16-million. Two years later Kerzner's equity stake in Kersaf was valued at more than R90-million. There is an assumption that Kerzner sold out all his SA interests when he left two years later to settle in the UK. Greenblo estimates he would have grossed more than R130-million for the sale of his shares in Kersaf and Safren. Assuming he converted this to dollars, he would have had about $65-million. Jumping to events and deals of more recent times, Greenblo says a $200-million value could be placed on his 18.6% equity stake in Sun International Hotelsfollowing its 1996 listing in New York. His stake was worth $332-million when the share was trading at its $54 high in October last year. Thus he was worth almost R1.5-billion at that stage. The New Jersey commission came to its decision after a year-long investigation of Kerzner to ascertain whether he was of good enough character to hold a permanent licence. Central to the probe was the alleged R2-million bribe to Transkei leader George Matanzima. Kerzner was cleared in SA, but the issue resurfaced when he applied for the Atlantic City licence. The commission found he had committed bribery, but said it was unfair to disqualify him for something he did a decade ago and to apply US laws to what happened in the Transkei. Commission chairman Bradford Smith said: "Having observed Kerzner testify, we find that he was a candid and forthright witness. Based on the entire record before us, the unsavoury aspects . . . are an aberration that occurred a decade ago, and Kerzner has clearly and convincingly demonstrated good character, honesty and integrity."
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