You may have heard of Louis Klopper as one of the famed Business Rescue Practitioners (BRP) for the Gupta companies.
Louis took on this role in February 2018 when the eight Gupta companies, largest of which was Optimum Coal, were placed in business rescue after local banks cut off the companies’ banking facilities at a time when the press was swirling with stories of the Guptas’ undue influence over then-president Jacob Zuma.
It’s been a long and agonising road for the BRPs. They had to face down more than 60 court cases from a swarm of lawyers, opportunists and Gupta proxies seeking to remove them as practitioners or liquidate the companies and pocket handsome fees that would have run to as much as R300 million.
That never happened. Every one of the court cases was defeated and the companies will likely soon have new owners, with fresh capital, ready to recommence operations.
Louis was one of the first to be awarded the prestigious CFO (SA) designation by the SA Institute of Business Accountants (Saiba) and is also a member of Saiba’s technical committee, in charge of Business Rescue.
He was born on a dairy farm in Howick in Kwazulu-Natal, and later attended school in Pietermaritzburg. He started his career at Trust Bank (later acquired by Absa), moving steadily through the commercial, asset finance and corporate branches of the bank. He ended up as area manager for corporate banking, a position that required him to keep a nurturing hand on the bank’s corporate clients.
“In those days you would do regular reviews of your clients and alert them to potential financial or operational risk areas identified during the reviews. We were advisors to our clients, and we wanted them to better manage their own businesses. Bankers don’t give that kind of advice today because of potential legal liability. But 30 years ago, this was how we operated in banking.”
It was a small step from banking to business turnaround. Louis left the bank rather than accept a position that required him to relocate to Johannesburg – he’s a KZNer to his core, and the thought relocating his family to Johannesburg was a stretch too far.
Over the following 17 years he has helped scores of struggling businesses get back on their feet. Then, in 2011 the amended Companies Act became law, and it introduced the concept of business rescue. Prior to that, most businesses in financial distress were simply placed in liquidation, and that opened the doors to all manner of opportunists and freebooters.
In most cases he has seen, business is distress can be rescued. It takes a little time, patience, and corrective medicine.
What are the main causes of business failure? There’s nothing mysterious about that, says Klopper. “It always comes down to cash flow, but there can be 100 different reasons for weak cash flow, and that is where you have to focus your attention. It could be theft, inefficiencies, poor decisions, failure to change, and many more. And waste. Most companies have waste, especially waste of time. I am a big admirer of the Japanese, who have mastered the elimination of waste. You look at their factories and once a product has finished one stage of the production process, not a second is wasted before proceeds onto the next stage. They attack waste with a passion. In companies I am involved with, I see a lot of waste, and any company that is going to survive must eliminate this.”
Louis is a member of Saiba’s technical committee and heads up its Business Rescue unit. Together with input from academia and Saiba’s internal technical resources, he is currently putting together training materials that will develop Saiba members to become licensed business rescue practitioners. The Companies and Intellectual Property Commission (CIPC) recently amended its requirements for recognition of BRPs: they must be recognised by their professional bodies, and must demonstrate that they have the necessary competence to engage in business rescue. There will also be opportunities to apprentice under experienced BRPs such as Louis Klopper.