One such shareholder, Mario Pretorius, pictured right, found himself in the limelight last week when minister of finance Pravin Gordhan announced that he would be piloting a bill through parliament designed to limit the influence of private shareholders over the central bank.
"Certain shareholders might be circumventing the law and accumulating the shares to influence decision-making at the annual general meetings of the board, and to improperly interfere in the operations of the bank itself," Gordhan said.
What influence is he talking about, asks Pretorius. He points out that, in reality, the bank's shareholders have had no influence over its behaviour at AGMs or anywhere else.
Indeed, the bank has provided a perfect model of how not to treat shareholders, he says. It has simply ignored them, in defiance of company law, which makes it the right of shareholders to participate in AGMs.
"The bank has treated us with absolute disdain year after year."
Since buying his shares four years ago, the bank has not answered one of his written questions or those he has tried to pose from the floor at AGMs.
According to company law, it is the legitimate and required role of shareholders to influence the bank's corporate governance. They have never been allowed to do this, Pretorius says. He finds it nonsensical that the government should want a law curtailing a legitimate right that shareholders were never allowed to exercise in the first place. To cast shareholders in the light of rebels or "traitors" for wanting to exercise their rights is arrogant, he says.
"The bank is a privately held company. Why is he (Gordhan) saying we have limited rights? Could he please quote me the act and regulation that limited my rights?
"Why is he saying the bank does not fall under the Companies Act when it does? The Public Investment Corporation is a creature of statute like the bank and it is under the act. What makes the bank special?"
As for improperly interfering in banking operations, Pretorius says he wants to know what operations are being referred to.
Shareholders accept that they are entitled to no influence over the all-important monetary policy committee, which sets interest rates.
Besides corporate governance, bank operations are determined according to a mandate laid down by the minister. The shareholders have nothing to do with this and do not expect to. But to try and curtail their influence over corporate governance is contrary to good governance.
"Shareholders have an important and legitimate role to play in corporate governance. That is what shareholders are supposed to do. The power (at the Bank) has been concentrated in management for too long. It's one-sided," Pretorius says.
"It makes a mockery of the King II report [on corporate governance in SA] on what relations between management and shareholders should be, namely open and transparent and participatory on the part of shareholders."
Pretorius warns that, by excluding outside shareholders and/or curtailing their rights, corporate governance will go the same way of many parastatals.
"We'll be back to something akin to Eskom and South African Airways with no outside shareholders. Who'll ask questions of the remuneration committee, such as why is the governor sitting on the remuneration committee when King II says the executive shall not.
"I'd like to see the committee's recommendations come before the shareholders so we can say: 'Yes, we like it.' Who'll ask why Tito Mboweni was the third-best paid central banker in the world? Who'll ask where is the bank's BEE shareholding? Where's your effort at that?"
Earlier in the year, Reserve Bank governor Gill Marcus hit out in a letter to shareholders, chiding them for being driven by self-interest and the profit motive, not the national interest.
“Profit-making should never be a motive for holding shares in the Bank,” she said, explaining that the Bank acts in the public interest and is neither designed nor expected to maximise profits.
Source: Times Live
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