The Board of Mvelaphanda Group announced on 3 September 2009 that it would undertake a realisation and/or unbundling strategy in order to unlock value for shareholders, thereby removing the significant discount to the intrinsic NAV at which the shares trade. In addition to the discount to intrinsic NAV at which the shares trade the current corporate structure is not appropriate to take advantage of the changed BEE landscape.

The Board is being reduced from ten to five members made up of four non-executive directors, of which three will be independent, a non-independent director and one executive director. Mikki Xayiya, the current Executive Chairman, will be the non-executive Chairman with Ernst Röth being the sole Executive Director. The three independent non-executives who will remain on the Board are Bryan Hopkins, Kuseni Dlamini and Oyama Mabandla.

Messrs Carl Stein, David Moshapalo, Ramesh Patel, Ms Mpumi Mpofu and Ms Yolanda Cuba will resign from the board of directors with effect from 31 December 2009.

The Board has satisfied itself that the restructured board size is adequate to undertake its role as required by the Companies Act and the King Code on Corporate Governance.

In line with the JSE Listing Requirements, which requires each issuer to have a financial director as an executive, Ernst Röth will be seconded by the management company to perform the duties of Financial Director. He will also fill the role of Company Secretary.

As the company will not be taking on any new strategic investments, all employment contracts with the employees in the investment division have been terminated while the employees in the operations and administration divisions have been redeployed to Mvelaserve, which has been operating independently from 1 July 2009. However, in order to implement the realisation strategy, the Board recognises the need to have persons who are familiar with the Group’s investments, able to implement the realisation strategy and monitor the on-going post-investment management of the investments. For this reason a management company is to be formed to manage the day-to-day affairs of the company and more importantly, to unlock the value for shareholders in the most optimal manner.

In order to incentivise the management company, a participation fee structure has been agreed based on the successful implementation of the strategy. This is intended to ensure that the interests of shareholders are aligned with that of the management company. A voluntary fairness opinion has been received from an independent expert in this regard.