SPAR Chair & Deputy Resign - What CA(SA)s Can Learn
2 Min Read
On Monday morning, Spar told shareholders that its chairman and deputy chair had both resigned with immediate effect.
Mike Bosman had chaired the board since December 2022, while Shirley Zinn joined in February 2023 and became deputy chair that June. Lwazi Koyana, a CA who chairs the risk committee, steps in as interim chair while the nominations committee runs a search.
The SENS gave no reason, but a joint statement from Bosman and Zinn, reported by Financial Mail, did: stating hostility and, at times, threats from certain current and former Spar retailers and former employees.
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In May, elected representatives of the Spar National Council, the body speaking for the independent retailers who own the stores, petitioned the board to ask for Bosman's resignation. Business Day reported the petition went in on 8 May, after a meeting with group executives led by CEO Reeza Isaacs.
The board's response at the time was not subtle, as It backed Bosman and called the request baseless, vexatious, malicious and without merit - a lot of big mean words.
Three months later, he's gone.
Here's the governance mechanic worth considering. Spar's retailers own no shares, and they can't requisition a meeting under section 61 of the Companies Act, nor can they remove a director under section 71. So on paper, they hold zero governance power.
However, in practice they hold most of it, because they are the operating business. Spar Group Ltd is a wholesaler, while the stores belong to independent owners who choose to buy from it. If enough of them stop cooperating, there isn't a revenue line left to defend.
King V, which replaced King IV in October 2025, puts this under Principle 13. The governing body adopts a stakeholder-inclusive approach in the long-term best interests of the organisation. Practice 138 says the board should recognise the rights shareholders hold in law while also appreciating that the company is a nexus for the interests of a variety of stakeholders.
Two practices under that principle read almost as commentary on this week. Practice 135(a)(i) asks boards to identify the stakeholder groupings that could significantly affect the organisation because of its reliance on social and relationship capital. Practice 135(c) asks for dispute resolution mechanisms to preserve relationships where possible.
A petition, a public rejection of that petition, and two resignations three months later is not what a functioning dispute resolution mechanism looks like.
The conflict that might not be a related party
The other thread is Zinn's directorship of Tuesday Consulting, a Johannesburg executive search firm. The Citizen reported an alleged investigation into potential conflicts arising from her outside directorships. Spar confirmed it has used Tuesday Consulting from time to time in its recruitment processes and said conflict management measures were applied.
What’s interesting is that the three different rule books in our syllabus give different measuring sticks for related parties:
IFRS. Under IAS 24, any director is key management personnel, so Zinn herself is a related party of Spar. Tuesday Consulting is a different question, and it only becomes a related party if Zinn controls or jointly controls it. IAS 24.11(a) says so directly: two entities are not related parties simply because they share a director. On the accounting definition alone, fees paid to that firm may sit outside the related party note entirely.
JSE Listings Requirements. Section 10 casts a much wider net. A related party includes any person who is, or was within the preceding 12 months, a director of the issuer, plus their associates. So Zinn is captured whether or not IAS 24 captures her firm. What spares Spar a circular and a shareholder vote is size. Paragraph 10.6(b) exempts transactions where both percentage ratios are 0.25% or less, and recruitment fees at a company turning over R67 billion in a half-year won't come close.
Companies Act. Section 75 ignores size completely and says; a director with a personal financial interest must disclose its nature and extent before the matter is considered, must not participate in the decision, and must not sign for the company on it.
So you can have an arrangement that's immaterial for IFRS disclosure, exempt from JSE approval, and still carries a live section 75 obligation.
Worth saying & please note: nobody has established that anything here was mishandled, and Spar says its processes were followed. The structure here is the lesson.
Where a governance fight shows up in the numbers
If you want to watch a broken relationship turn into a number, read Spar's H1 FY2026 for the 26 weeks to 27 March 2026.
Revenue from continuing operations rose 3.6% to R67.5 billion.
HEPS from continuing operations fell 53.9% to 199.9 cents.
Southern Africa operating profit dropped 72.6% to R237.7 million.
Net debt went from R5.4 billion at September 2025 to R7.3 billion.
No interim dividend.
Spar said its H1 review adopted a more conservative provisioning methodology, producing increased expected credit losses. Debtors' days in SA Groceries and Liquor held steady at 32, while overdue balances rose.
That's IFRS 9 doing its thing. Spar isn't only a supplier to its retailers, it's a creditor to them and under IFRS 9 the loss allowance shifts to lifetime expected credit losses once credit risk has increased significantly since initial recognition, and the standard insists you use forward-looking information rather than waiting for balances to age.
Put that next to a retailer network in open revolt and you get the uncomfortable version: when your customers are also your debtors, a relationship breakdown is a credit event before it is a revenue event.
The history underneath all of this is its own irony. Spar's statement this week describes Bosman as having been appointed at a time of exceptional difficulty caused by "serious governance matters previously reported to shareholders", a reference to the retailer-loan issue that surfaced in late 2022 and produced a reportable irregularity. He was brought in to clean up a governance problem and he has left because of a different one - makes you wonder where the issue lies…
Insights From The Pocket CA
We've partnered with Pocket CA, an AI tool built for accountants, and ran this situation through.
Here’s the technical detail from the number-crunching machine:
IAS 24 Related Party Disclosures
Key management personnel covers any director, executive or non-executive. Every director is automatically a related party of the company.
An entity only becomes a related party where KMP controls or jointly controls it, or has significant influence over it. A shared directorship alone isn't enough (IAS 24.11(a)).
Disclosure attaches to the relationship, not only to transactions. IAS 24.7 notes that financial position can be affected by a related party relationship even where no transaction happens.
IAS 24.10 requires substance over legal form when deciding whether a relationship exists.
JSE Listings Requirements, Section 10
A related party includes anyone who is, or was in the prior 12 months, a director of the issuer, along with their associates.
Standard treatment needs a circular, a fairness opinion from an independent expert acceptable to the JSE, and a shareholder vote from which the related party's votes are excluded.
Paragraph 10.6(b) exempts transactions where both percentage ratios are 0.25% or less. Paragraph 10.7 sets a lighter regime between 0.25% and 5%.
Companies Act, section 75
Disclose the nature and extent of a personal financial interest before the matter is considered, don't participate in the decision, don't execute documents on it unless directed.
A director may lodge a standing written notice of interests in advance under s75(4).
No materiality threshold applies.
IFRS 9 Financial Instruments
The loss allowance moves from 12-month to lifetime ECL when credit risk has increased significantly since initial recognition (5.5.3).
The test is the change in the risk of default occurring, not the change in the amount of expected loss (5.5.9).
Forward-looking information must be used where available without undue cost or effort. Waiting for balances to go past due is too late (B5.5.2).
For financial guarantees, you assess the change in risk that the specified debtor defaults, with initial recognition dated from when the entity became party to the irrevocable commitment (5.5.6).
Check out the Pocket CA, and get your own CA on speed dial.
What changed in King V
Worth a section of its own. King V launched on 31 October 2025 and applies to financial years beginning on or after 1 January 2026.
Seventeen principles became thirteen. King IV Principle 17, aimed at institutional investors, fell away entirely.
The four governance outcomes were refined to Ethical Culture, Performance and Value Creation, Conformance and Prudent Control, and Legitimacy.
"Apply and explain" survives, but disclosure is now standardised through a mandatory King V Disclosure Framework. Claiming application of King V without using it isn't an option.
Independence criteria were rewritten (practice 42). The nine-year tenure rule is no longer a standalone practice, it's one factor among several, and related party relationships are now explicitly on the list.
Board composition sits under Principle 5, stakeholder relationships under Principle 13.
Remuneration under Principle 11 now names malus and clawback triggers at practice 114(e), and minimum executive shareholding at practice 114(g). Both are precisely what Zinn introduced at Spar as remco chair, which is a decent illustration that leading practice usually gets codified after someone has already done it.
One timing detail that matters here. Spar's FY2026 runs to 25 September 2026, so it began in late September 2025, before the King V effective date. Spar's next integrated report is still a King IV report. King V bites from FY2027.
The Bottom Line
The takeaway isn't really about Spar's specific facts, most of which are still contested. It's about where governance power actually sits. The Companies Act hands votes to shareholders. King IV asks the board to consider stakeholders. At a wholesaler whose stores belong to other people, the stakeholders had the leverage, and eventually they used it.
If you're in articles on a group with a franchise or independent-retailer model, this is a decent prompt to go and read how those relationships are papered. The related party note and the credit risk disclosures both run back to the same question, which is how much of this business the group actually controls.
Until next week,
The Journal Entry Team
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