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Dorbyl parts company with another director

Posted On Wednesday, 22 March 2006 02:00 Published by eProp Commercial Property News
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Construction company Dorbyl finally severed its ties with former director Rob Duff on Monday, announcing his resignation from the company weeks after announcing it had fired another director

Construction IndustryConstruction company Dorbyl finally severed its ties with former director Rob Duff on Monday, announcing his resignation from the company weeks after announcing it had fired another director, Edwin Vorster.

Dorbyl has been in the spotlight recently for selling US housing subsidiary Alpine to a consortium including CEO Bill Cooper for $158m, only for Alpine to be sold barely months later for $250m. This raised the question of whether directors, already being paid heavy bonuses, were simply looking to make money for themselves.

When it came to Vorster, Dorbyl said last month only it had fired Vorster for "misuse of company assets".

But Cooper said he "couldn't comment" on whether assets belonging to shareholders were missing due to Vorster or Duff, or whether Dorbyl would be taking any action to recover assets.

Dorbyl has refused to explain the reasons for their departure to shareholders. Both directors were suspended in December.

"The short answer is that the Labour Relations Act makes it difficult to make comments because of the legal issues surrounding the situation," said Cooper.

But Cooper also confirmed for the first time the existence of an internal document written some years ago that sets out sale values for certain Dorbyl assets, including bonuses that would be paid to executives for doing so.

"It wasn't an asset-stripping document, but there was a concern expressed to say the company was trading at a huge discount to its share value," he said.

Cooper said that at the time the share price was R13, while the net asset value of the company was about R23 a share.

He said there "was action in terms of the document", with the intention of "releasing value to shareholders".

But last year, for example, as Dorbyl's profits fell 22%, directors' cash incentives were R3,8m - nearly a third of the total salaries paid to Dorbyl directors.

Directors were also rewarded for the sale of Dorbyl's US arm Alpine in June last year for $158m. But questions have arisen over that sale, firstly because Cooper held 0,4% of the shares in the consortium that bought Alpine, and secondly because the consortium sold Alpine for $250m last month.

Cooper defended Dorbyl's action to sell Alpine for $158m earlier this week, saying that "with the best intentions, no one could have foreseen what would happen with the US housing market". The value of US construction companies has risen markedly after the New Orleans and Florida hurricanes.

 

Last modified on Thursday, 17 October 2013 20:11

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