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ATL assesses progress since suspension from BSE KABO MOKGOABONEStaff Writer 9/14/2004 9:59:30 PM (GMT +2)The troubled tourism outfit - Afritourism Limited (ATL), held its much-awaited annual general meeting (AGM) on Monday, without the expected fireworks from its shareholders. This was the first meeting - which included shareholders - since the company was suspended from trading from the Botswana Stock Exchange (BSE) venture capital board.

However, the newly appointed chairman of the ATL group Sanjeev Gupta - who is also the CEO of Botswana Insurance Fund Management (Bifm) - the majority shareholders - painted a positive outlook for the company since a new strategy was put in place to turn it back to profitability.

Bifm is said to have already injected about P5 million to save the company.
Gupta replaced Glynn O’Leary, who was fired as chairman after the company was suspended from trading on the BSE in July, while Myra Sekgororoane replaced Peter Wright as chief executive officer.

Gupta told the AGM that the performance of ATL is being closely monitored in order to bring changes that would take it from red to black.
“The management is bringing about the required changes and the main shareholders and bankers currently remain behind ATL and support the changes being brought in. The business model is being closely scrutinised,” Gupta said, adding that the management is coping with the demand that the board has made in terms of restructuring and cost cutting measures.
“We intend to spread our operations. Even though the last six months were not tourism friendly, we expect that changes will bear fruit in the second half of the year,” Gupta said.
He described the current period at ATL as a ‘distress” period of which if the new changes brought are not fruitful, there may be a need for other initiatives to be put in place.

However, at the AGM, the sole voice of discontent was from Johnny Ray - one of the attendants - who kept the AGM alive by questioning its management style, which has failed to meet its profit target and instead has made losses.
“The business model is good, but the problem is with the management team. I am extremely disappointed with the management team and suggest that the whole marketing strategy should be looked at,” Ray said.

Ray objected to the re-appointment of O’Leary as a non-executive director and the approval of the remuneration of the staff. “The remunerations are not justified,” Ray said.
He said he objected to the re-appointment because he said under O’Leary’s leadership, the company posted poor results. However, the majority who were in attendance felt that O’Leary remains important as he has vast experience in the tourism industry and they overruled Ray’s objections.

Ray, who is said to be the one who came up with the concept of Afritourism, was reminded that he should also take the blame as he watched the performance of the group deteriorate, but he defended himself by saying he had other businesses to take care of.

The majority shareholder in ATL group is KYS, which is a subsidiary of Bifm, which holds a 60 percent stake in KYS. Other shareholders include 10 individual vendors, who sold their 19 related tourism operations to ATL and subsequently became shareholders.
There are also some fears that the group will be subject to an investigation by the BSE, whereby key people involved in the dismal performance of the group would be called in to testify.
Afritourism listed on the BSE in March 2003 but has seen its share value tumble by more than 70 percent. It failed to meet the profit target of P 3.7 million it set in January, and instead made a loss of P 6.7 million.

Although the company blames its poor performance on the war on terrorism, the depreciation of the Pula against the US Dollar and political problems in Zimbabwe, shareholders like Ray blame the poor performance on poor management.

The other tourism outfit, which is listed on the BSE, is Chobe Holdings, which is suffering a similar fate of events in the Middle East.