THOM MCLACHLAN

JOHANNESBURG businessman Maxim Krok’s elaborate plan to dispose of his R500m holding in the Gold Reef casino group before quitting the group and emigrating to Australia has collapsed.

Krok had hoped to sell Gold Reef to a private equity consortium led by UK group Ethos, paving the way for his resignation as chairman and the sale of his substantial stake in the company.

The Krok family’s holding in the casino group is believed to be worth about R1,6bn.

Krok’s plan to move to Australia began to take shape last year when he bought Sydney’s most expensive residential property for R180m, called Tahiti because of its island-styled house, above Hermit Bay in the southern harbour-side suburb of Vaucluse.

The house boasts a subtropical rainforest atrium, a state-of-the-art movie theatre, a swimming pool adorned with a giant hibiscus motif, a garage for six cars, staff and guest quarters, and direct access to the beach.

However, the Ethos deal began to unravel when it emerged late last year that Gold Reef paid Krok R12m to facilitate the deal.

Following an investigation into the allegation, the Securities Regulation Panel decided to review its approval of Gold Reef’s private- equity deal, a decision which could take weeks.

The private equity deal collapsed as a result.

However, Krok may not be off the hook.

Should the panel find that the authority’s codes were breached, Krok could find himself under investigation by SA’s gambling authorities.

The Gauteng Gambling board said on Friday that it was not investigating any directors at Gold Reef at present.

But it confirmed that should it be brought to its attention that a director, or a shareholder holding more than 5% of a company, was involved in “unsuitable” dealings, the board would be obliged, following its own investigations, to “disqualify” their licence, meaning that they would no longer be allowed to work in the local gambling industry.

This could mean Krok’s imminent resignation, or at the very least, it could fuel his desire to sell the company quickly, working in favour of rival gambling group Tsogo Sun’s desire to buy the company out.

Talks between Tsogo and Gold Reef are still preliminary, but it is reasonable to assume that it is in both parties’ interests to conclude this quickly.

Considering the history, and that each knows what the other wants, it is also reasonable to assume that discussions will be limited to price, further warranting a speedy resolution.

Meanwhile, Krok has resigned from pharmaceutical group Aspen Pharmacare as a nonexecutive director due to his imminent emigration to Australia.

This raises questions as to how soon he will be stepping down from Gold Reef, where he also represents a 25,9% stake held by the Krok family.

Should Krok resign of his own accord immediately, he would sell his shares at a lower price than he would receive from a possible buyout by Tsogo.

However, when Krok does finally manage to leave the country, with or without a fair price from Tsogo, he is likely to get a cold reception in Australia.

Australian daily newspaper The Sydney Morning Herald ran an article

During the apartheid years, Krok’s father and uncle, Abe and Solly Krok, courted controversy when they patented and sold skin whitening creams to black people who were trying to escape the country’s racist laws.

Krok was not available for comment as The Weekender was told he would be in Australia for the next two weeks.

Source: Business Day