was to benefit greatly from a brilliant move Rupert had made even before the formation of the group. Towards the end of 1945 he went on his first overseas business trip, in search of the necessary machines and to make arrangements to obtain essential technical services. In England he met Sydney Rothman, head of the celebrated tobacco house Rothmans of Pall Mall, and concluded a strategic agreement that would have far-reaching consequences.
The 29-year-old Rupert, who was then still based in Johannesburg, had become friendly with Gordon Douglas, head of Rothmans’ South African agency. Douglas was of great help to Rupert in the early years. With a view to the young Afrikaner’s overseas trip, he briefed him on the finer details of travelling an international businessman had to master, such as tips for chambermaids and at which hotels to stay. Douglas also wanted to propose Rupert as a member of the exclusive Rand Club, regarded as the canteen of the Chamber of Mines and with a membership of wealthy English businessmen and mine-owners. Although Rupert, with names like Anthony Edward, would probably have been accepted without any difficulty, he declined the offer politely, explaining to Douglas that he could not become a member of a club where someone like the respected Afrikaner industrialist Dr Hendrik van Eck was not welcome.
In October 1945 Rupert boarded a BOAC airship for the trip to London that lasted six days and six nights. Flying low over the vast African continent, he was awed by its grandeur and unspoilt natural beauty. It was just two months after the nuclear explosions in Japan, which weighed heavily on his mind. Large cities in Europe and Britain had been flattened. With such powers of destruction at its disposal, humankind had to see reason or it faced extinction. Imperialism and colonialism, he concluded, were dead. Africa was moving towards a new, independent future. His view of Africa from the air, coupled with the realisation that humanity had acquired the power to destroy itself, strengthened his conviction that coexistence had become imperative – between humans, but also between humans and nature.
‘The era of paternalism, where everything had to be done for others, had failed. In future, success could only be achieved if one planned and acted together with others. The time of doling out fish to the hungry was past. It had to make way for an approach of teaching them to fish. Hence the concept of coexistence through partnership,’ he said in a magazine article.
On his arrival in war-ravaged London, Rupert phoned Rothman’s office to confirm the appointment he had made from Johannesburg. He was told that Rothman could only see him in ten days’ time. Rupert replied that he had a four-day booking at Grosvenor House, the Mayfair hotel where he was to occupy the same suite on all his visits to London over the years (just as he would remain a client of the same bank, Volkskas, and the same insurer, Sanlam, for many years). If he could not see Rothman within those four days, he would have to go home. Rothman checked his diary again and arranged to meet Rupert that same afternoon at four o’clock.
The meeting with Sydney Rothman was in many respects a watershed event. That afternoon, Rupert entered into an agreement with Rothmans of Pall Mall to manufacture Rothmans’ brand in South Africa in exchange for technical expertise. They clinched the deal with a handshake − a formal contract was not signed until 1948, when the first cigarettes had been produced in the factory in Paarl.
Rothmans became the company that provided Rupert with technical advice. In the typical fashion of a true entrepreneur, he would go to immense lengths to obtain the right advice. He appointed people who could complement his own entrepreneurial abilities and established networks at an early stage.
Rothmans’ technical advice proved invaluable to Rupert, as Sydney Rothman had grown up in the tobacco industry. His father Louis, a Russian Jew who had been born in the Ukrainian capital Kiev, had learnt the trade as a young boy in a cigarette factory owned by his father and uncle. Louis Rothman immigrated to London in 1887 and by 1890 was making cigarettes in his spare time. His outlet was a small Fleet Street tobacconist. In 1900 the innovative retailer moved to Pall Mall, which became a world-famous brand name he had registered. The inventor of mentholated cigarettes, Louis Rothman was given the royal imprimatur − ‘By appointment to His Majesty the King’ − in 1905. Sydney became an apprentice in his father’s business in 1919 and, in 1923, a partner. Rothmans was listed on the London stock exchange in 1929. Among its regular clients were the media mogul Lord Northcliffe, the British premiers Lloyd George and Winston Churchill, and King Alfonso of Spain.
Rupert’s journey home was ill-starred. The airship came to grief on the Nile and the passengers were stranded in Khartoum for six days before they could return to Cairo. In Cairo he was told there was no room on a flight to South Africa for the following week, also not for the two weeks after that, perhaps in two months’ time. Only VIPs like generals could get preference. As an insignificant young Afrikaner, he was well and truly stuck. In desperation he decided some gallantry might do the trick. Recalling that the woman behind the counter at the airline office was past her prime, he bought a magnificent bunch of roses in a street in Cairo, and had it delivered to her. ‘I was on the next flight back to South Africa,’ he later told a group of amused Pretoria commerce students.
It was by no means all plain sailing in the founding years of the Rembrandt Group. Before Rupert’s departure for London TIB had a bank balance of £120 000, proceeds of an issue of ten-shilling shares sold at 12s 6d. It was agreed that any financial transactions after the listing had to be approved by two of the three TIB directors − he, Dirk Hertzog and Fritz Steyn, then a lawyer in Johannesburg. On Rupert’s return to Johannesburg he was notified by Jan Hurter, accountant and later managing director of Volkskas, that shares had been bought back and their account was heavily overdrawn − would they please do something about it? Rupert was astonished. Dirk Hertzog was equally in the dark. It turned out that Fritz Steyn had bought back shares, issued shortly before at 12s 6d, at 16s 3d on the advice of a broker to support the price – allegedly to maintain Afrikaner prestige! Rupert could only describe this as ‘sheer nonsense’. In his view, ‘the prestige lies in establishing the company and then in doing good business.’
Although the company was not insolvent, it had suffered a significant setback. It took a long time to pay back the overdraft. Rupert said afterwards that the episode had taught him a big lesson: ‘Always make sure you get the right advice.’
One important consequence of this misfortune was that in 1946 they formed a second investment company, Tweede Tegniese en Industriële Beleggings (Second Technical and Industrial Investments), later to be renamed Tegniese Beleggingskorporasie (Technical Investment Corporation) or Tegkor for short. This was again Rupert’s inventive plan to raise cash and to help TIB meet its obligations regarding the take-up of further shares in Distillers. Investments were spread over a range of industries: tobacco (Voorbrand and Rembrandt), wool (Wolgroeiers Afslaers Beperk), coffee and tea (Theal Stewart and Biesheuvel Eiendoms Beperk), and coal (the Klipfontein group of companies). The upshot was a pyramidal structure with the Ruperts and Hertzogs in overall control. Rembrandt Beherende Beleggings (Rembrandt Controlling Holdings), in which Tegkor had a 40,6% interest, retained 51,1% in Rembrandt Group Ltd. At the top of the pyramid was Rembrandt Trust (Pty) Ltd, in which the Hertzogs had a fairly small 5,6% interest compared to Rupert’s lion’s share of 80 to 90%. The Rembrandt Trust became the basis of his wealth, but also the reason why in later years he bought or sold virtually no shares on the open market − his view was that whatever he did could influence the market.
In 1946 TIB vacated its Johannesburg headquarters − by then they had moved to the Volkskas building, where they had two vermin-infested offices with few amenities − and the entire staff moved to Distillers’ premises in Stellenbosch. These were still under construction, the windows unglazed. Most of the staff members were later transferred to Ou Rosenhof across the road in Dorp Street, with Rupert retaining his office at Distillers, until the new Rembrandt building was ready.
Rupert preferred the peaceful, rustic environment of the university town of Stellenbosch to the hustle and bustle of city life. In the late 1940s the town had only some 12 000 residents, 2 400 of them students. Yet it was conveniently close to Cape Town’s
