Bill limits SARB shareholders

Cabinet has approved the SA Reserve Bank Amendment Bill that will limit shareholders' activities.

This followed concerns that activities by private stakeholders were attempts to undermine the bank's independence, Finance Minister Pravin Gordhan told a media briefing in Pretoria on Monday.

"The governor [Gill Marcus] has concerns about the way in which private stakeholders have been conducting themselves," Gordhan said.

Private stakeholders had recently voiced concerns about their involvement in key decisions.

"There are no rights as far as we are concerned that the shareholders have or think they have," said Gordhan.


One of the objectives of the bill was to stop shareholders from circumventing the act's current limitations of the maximum of 10 000 shares per stake per shareholder. [also see Nationalising the Reserve Bank]

Gordhan said it had come to the Bank's attention that a "fringe group" was attempting to improperly mobilise their shares as well as share profits and assets in an attempt to influence the bank's decision making capabilities.

Another objective of the bill included allowing for the nomination of directors - seven of whom were private stakeholders - to a broader base of the South African public.

The act would also provide for the establishment of a panel for the election of directors and to define clear criteria regarding when people should be disqualified from serving.

Gordhan said the timeline for the speeding up of the approval of the bill was largely a result of the recent activities of this fringe group.

Michael Duerr, who claims to speak for 25% of the shares through friends and family, told the M&G a group he calls the Shareholder Activists Reserve Bank were "dismayed that the Minister of Finance and Cabinet, following no contact with the shareholders whatsoever, have adopted the SARB position that open debate and discussion around their activities constitutes inappropriate and disloyal behaviour".

He said the bill was a "complicated way to avoid the long overdue and necessary changes to the SARB Act and its management," and claimed that "shareholders have never been given the opportunity to engage with the management of the SARB.

However Duerr statements don't take into account the vocal minority's attempts to increase their dividends. Individuals are not meant to profit from their involvement in the central bank.

Source: Mail & Guardian