IF EVER you want an advertisement for why it helps to stay unlisted if you’re not so keen on transparency, look no further than one of South Africa’s largest private companies, Macsteel.

There are some very strange goings-on at Macsteel at the moment, which would have guaranteed screaming banner headlines were its goings-on being distilled through the JSE’s news service, SENS. Yet Macsteel’s response is “no comment”, claiming “we’re a private company” and this is nobody’s concern but their own.

Perhaps most puzzling of all is the sudden suspension this week of Macsteel CEO Mike Pimstein.

The well-regarded Pimstein, a former president of the Steel and Engineering Industries Federation of South Africa, has been at Macsteel for decades and CEO for 15 years.

Quite why Pimstein was suspended, he won’t say. “I cannot comment as we are going through a process now,” he says.

But in the absence of details, rumours are swirling about how information leaked out during the process that had been put in place to sell Macsteel, a plan that imploded.

In February, Macsteel revealed it was entertaining offers to sell 100% of its shares. The main beneficiary of this would be the 65% owner, the 75-year-old Eric Samson, black empowerment groups which hold 25.5% and management.

Samson himself is a fascinating guy. Widely considered one of South Africa’s richest people, he won’t be spotted on any of the rich lists because his wealth doesn’t sit in listed companies where the shareholding is public.

The BEE shares are also held by heavyweights including Cyril Ramaphosa (his Shanduka group owns 7.5%) and the hotshot women of Peotona (which owns 2.5%): Cheryl Carolus, Dolly Mokgatle, Thandi Orleyn and Wendy Lucas-Bull.

Investec Bank ran the process, and received “strong worldwide interest” from more than 70 companies. This was eventually narrowed to three groups — the first being a consortium made up of Bidvest, Shanduka and Peotona; the second a consortium led by BEE company Southern Palace; and the third being overseas investors.

It would have been an immense deal. While Macsteel guards its figures closely, it’s a company that clocks up revenue of about R15bn a year.

Insiders close to the sale put an estimated value on the company of anywhere between R7bn and R10bn.

This would put the value of Samson’s shares at between R4.5bn and R6.5bn — placing him above the likes of Pick n Pay founder Raymond Ackerman, Discovery CEO Adrian Gore and ANC deputy president Cyril Ramaphosa on South Africa’s rich list.

Yet last month the sale of Macsteel collapsed. If there was such strong interest, why did it? Did Samson believe Macsteel was worth more than he was offered? Is he waiting for the steel market to recover?

Macsteel’s explanation didn’t clarify anything. It said only that it was doing well in current conditions, so existing investors had decided to stay invested.

Macsteel “remains a highly successful organisation with quality assets and loyal and capable people”, it said.

Of course, when a sale process implodes, someone has to carry the can. Perhaps that is why Pimstein is out in the cold.

Macsteel won’t say. Samson’s daughter, Franki Cohen, also a director, says “things are confidential” and “it’s irrelevant” to anyone outside the company.

Tell that to the 5,000 people who work there, or the hundreds of smaller companies who do business with Macsteel, or the wider public who would want to know whether there are in fact larger governance concerns at a company that, while it is unlisted, remains a South African institution.

At some stage, Macsteel will have to come clean about Pimstein’s suspension. That could unlock some intriguing insights into why the sale of one of South Africa’s most secretive companies failed.

• This article was first published in Sunday Times: Business Times