ABASA – Association of Business Administrators of South Africa

©2004 Deloitte & Touche 2 ABASA Origin Mission Interim Executive Status

©2004 Deloitte & Touche 3 ABASA is an outcome of the Task Group for Organising the Turnaround and Business Rescue Industries Seated: Stephan Claassen (FNB), Lawrence Ngobeni (University of Pretoria - alternate for Professor David Burdette) (Secretary), Themba September (Corporate Renewal Partners) (Chairman), Mervyn King (Brait), Ricardo Graham (Maximus Turnarounds). Standing: Inus du Preez (FNB), Sarel Lategan (Standard Bank - alternate for Christo Faul), John Evans (Deloitte), Robin Taggart (Nedbank), Patrick Daly (Daly Incorporated), Kevin Cochrane (Nedbank - alternative for Anna Isaac), Krisjan Barnard (Absa - alternative for Trevor Murgatroyd), Jan van der Walt (Corporate Renewal Partners), Les Matusen (Credit Management Solutions - alternate for Rowan Gordon), Jan Bicker-Caarten (RMB), Martin Leigh (RMB), David Gewer (Werksmans). Absent: Paul Winer (Werksmans), Michael Vacey-Lyle (FNB). Work Group of the Industry Task Group (Supported by 80 Advisory Group members): ORIGIN Grass-roots involvement from 100 participants from all constituencies in the turnaround and business rescue industries in South Africa

©2004 Deloitte & Touche 4 The Task Group assessed organised industry in terms of the model describing the timeline of financial distress The 4 stages in the timeline of financial distress: Informal Processes Insolvency Processes Management-led correction Informal creditor workout Business rescueLiquidation Emerging problemsAcute and worsening problems Insolvency but possible viability Insolvency and unlikely viability Turnaround in the absence of creditor and legal issues Informal agreement between management and creditors (banks) to reduce indebtedness Present: judicial management and Section 311 Compromise of Creditors Future: new business rescue legislation Realisation of the distressed company's assets and the distribution of proceeds to its creditors Management retains the initiative and controls the turnaround agenda Terms of workout agreement dictates agenda Banks hold the power Court-driven – inflexible and expensive Historically a low success rate But new business rescue legislation should deliver a higher success rate in stage 3 ORIGIN

©2004 Deloitte & Touche 5 The Task Group defined specific roles for ABASA and TMA ORIGIN The timeline of financial distress:

©2004 Deloitte & Touche 6 ABASA Origin Mission Interim Executive Status

©2004 Deloitte & Touche 7 ABASA is an industry-proposed business rescue regulatory body Mission - to: Regulate activities of Business Administrators (its members) in terms of new business rescue legislation Administer admission criteria based on: –Qualifications and experience during an interim period –Thereafter, exam on turnaround management, law and accounting as per TMA’s Certified Turnaround Professional exam: Curriculum customised for South Africa Courses offered by tertiary institutions Ensuring professional conduct and ethical behaviour reinforced by disciplinary measures Train and educate MISSION Become a member if you wish to take charge of a distressed business as a Business Administrator under future new insolvency laws

©2004 Deloitte & Touche 8 ABASA Origin Mission Interim Executive Status

©2004 Deloitte & Touche 9 Themba September (Chairman) The Interim Executive was elected on 11 th October 2004 ABASA Interim Executive David Burdette Mervyn King (Deputy Chairman Lawrence Ngobeni (Secretary) Patrick DalyMartin LeighJill Oliphant Jan van der Walt (Treasurer) INTERIM EXECUTIVE

©2004 Deloitte & Touche 10 ABASA Origin Mission Interim Executive Status

©2004 Deloitte & Touche 11 ABASA is in the process of requesting regulatory powers through government legislation ABASA was set up on request from individuals in government (but not by government itself) It is a registered Section 21 company, and an interim executive is in place ABASA is in the process of requesting regulatory powers through government legislation: –Either as self-regulatory –Or regulated by dti or DoJ Regulation may be influenced by the outcome of the Ministerial Committee of Enquiry into the Liquidations Industry While awaiting a decision on regulation, ABASA is there to: –Provide advice if advice is asked from government –To support and lobby for new business rescue legislation Membership recruitment will commence once clarity have been received from government regarding the way forward STATUS

©2004 Deloitte & Touche 12 For more information on ABASA: Web site: Questions? Themba September Chairman: ABASA Cell: