Top executives resignations at fishing companies’ raises speculation

Top executives resignations at fishing companies’ raises speculation

-‘Fishy’ cloud hangs over local fisheries as top executives suddenly resign

-A new quota is believed to be the turning point for execs that have resigned

- The most recent resignation is that of JSE-listed Sea Harvest CFO, John Paul de Freitas

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By Farai Diza - Freelance Journalist

While all eyes are firmly on South Africa’s projected Covid-19 economic knock, murky waters are splashing out from the local fishing sea after the unexpected resignations of senior executives at three big companies listed on the Johannesburg Stock Exchange (JSE).

Top CEO’s and finance directors of Sea Harvest, Premier Fishing and Brands (PremFish), and Oceana Group have tended in their resignations raising ‘fishy’ speculation that something just isn’t right in the industry.

The latest resignation to sail onshore is that of Sea Harvest Chief Financial Officer, John Paul de Freitas. Freitas stepped down this month having played an integral role in the company’s prosperity over six years.

Some of his achievements include listing Sea Harvest on the JSE.

He left at a time when Sea Harvest had just posted a gigantic 35% jump in profit after tax for 2019. It rose from R278 million to R410 million.

Paving fishing rights for more companies

It is rumoured that the kicking in of the new quota will lead to many big companies cutting down costs, shedding jobs and massively slashing salaries.

Deep sea trawling companies stand to lose over 10% of their fishing quota as the government steps in to allocate rights to more fishing companies. The rights were last awarded to the market’s long-standing heavyweights in 2005.

“Rational awarding of rights are necessary in order to preserve global competitiveness and boast employment creation. The hake industry, for example, contributes a massive R6.7 billion to the SA economy annually.
“The challenge that lies with the new quota is that we can’t afford to lose even 10% of the business. Frankly, we are a big business but we are also not a small scale fishery. When you are a huge capital intensive industry, even losing a single ton can be catastrophic,” said Terrence Brown, South African Deep-Sea Trawling Industry Association chairman.

With 22 commercial fisheries sectors and new fisheries being explored and experimented with, South Africa has two fisheries sector components.

A student economic analyst, Gugulethu Chauke, believes that more resignations are on the radar as big companies prepare for life after Covid-19 and the implementation of new government quotas.

“The fishing industry is bracing itself for a double-handed blow. Fishing companies are already struggling to trade with many nations because of the coronavirus. That’s a blow on its own.
"And remember there is also the impending quota. Larger fishing companies are projected to lose large chunks of their current catch quota to smaller community-based fishing companies. In that scenario, super tight cost-cutting measures will kick in,” she said.

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Resignations a sign of what’s to come

The key resignations might attract low investor confidence, further dampening progress in the industry. Some have professed that the industry – a politically charged one in relation to ownership and catch quotas – has been going through turbulent times regarding the fishing rights allocation process.

The process was scheduled to have kicked off earlier this year but was placed on ice to allow new environment, forestry and fisheries minister Barbara Creecy to familiarise herself with the industry as a whole.

“Someone sitting on a chair might not feel it but if I am sitting in my office in Saldanha 200 to 300 jobs might be lost here. We need to consider all outcomes. Bigger and smaller companies would lose jobs. It will be very catastrophic,” Brown added.

Big names are slowly leaving the sector in droves

PremFish was rocked by CEO Samir Saban’s resignation in February. Oceana Chief Financial Officer Elton Bosch vacated his office at the end of January to pursue other business interests.

PremFish issued a statement divulging that the company remained positive.

“The future outlook of the group, despite Covid-19, is one of cautious optimism and positivity. The group is still well positioned to create and maintain shareholder value through organic and acquisitive growth, thereby ensuring delivery on our stakeholder commitments,” the group stated.

But as the trawls, boats and nets continue sailing at sea, the fishing industry is going poorer with the sudden departure of top brains.

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Source: Briefly.co.za

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