Duerr resumes war of words with Reserve Bank

Duerr, who is vocal in his public criticism of the central bank and its management, sent a letter to governor Gill Marcus and the media this week regarding the bank's AGM on December 8 and the nomination of directors to be elected at the meeting.

According to Duerr, the replacement of directors at the AGM will be illegal as the SA Reserve Bank Amendment Act requires nominations for directors to be submitted three months before the meeting. The act came into effect on September 13, amending the existing act. Duerr said nominations for directors under the amended act closed on September 30, less than three months before December 8.

Marcus defends Reserve Bank Amendment Bill

Reserve Bank Governor Gill Marcus has come out guns blazing in defence of the Reserve Bank Amendment Bill. She's accused a group of private shareholders of the bank of improper conduct in their bid to wield greater influence in the bank. Marcus was responding to submissions made in Parliament during public hearings regarding changes to the Reserve Bank Amendment Bill.

It seeks to preserve the independence of the bank by preventing the formation of shareholder voting blocks, among others. The Bill seeks to limit the number of shares each individual shareholder can own to no more than 10 000. Shareholders have called the Bill outrageous, unconstitutional and nonsensical.

Reserve Bank bill process challenged

The Reserve Bank was pushing through amendments to its founding act with “unseemly haste”, Charl Kocks, head of African governance ratings agency Afrika Ratings, told MPs yesterday.

His criticism adds to the chorus of complaints by disgruntled Bank shareholders who object to the proposed amendments, intended to limit their power to elect representatives to the Bank’s board.

Countering this opposition during public hearings on the South African Reserve Bank Amendment Bill held by Parliament’s two finance committees were the National Economic Development and Labour Council (Nedlac) social partners.

Bank warned against shareholder change

It is not only disgruntled private shareholders of the Reserve Bank who are opposing proposed legislative amendments to the way the institution is governed.

An independent think-tank and a university professor have joined the chorus of opposition, on grounds that the proposals would undermine corporate governance and democratisation.

Until now opposition to the South African Reserve Bank Amendment Bill — and its provisions to limit shareholder power — has seemed to emerge from a fringe of noisy shareholders who every year cause a rumpus at the bank’s annual general meetings and are demanding a greater share of its profits as a dividend.

Have your say on the South African Reserve Bank Amendment Bill

The South African Reserve Bank Amendment Bill [B10-2010]

Submissions and Hearings

 The Standing Committee on Finance invites shareholders and interested parties to submit written submissions on the South African Reserve Bank Amendment Bill [B10-2010].

The Bill seeks to amend the South African Reserve Bank Act, 1989 (Act 90 of 1989) in order to achieve the following objectives:

• To amend the South African Reserve Bank Act, 1989, as to provide for the amendment of certain definitions, and the insertion of new definitions and the deletion of a definition;

More on the SARB shareholder muddle

Although it is said that shareholders in the SA Reserve Bank have no say in the operations of the central bank or monetary policy some shareholders use their holdings to disrupt Reserve Bank general meetings, using time-wasting tactics to press their demands, which the central bank and government say is, ultimately, to ensure bigger payouts.

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.

State ready to take on Reserve Bank shareholders

The government expects private shareholders unhappy with proposed changes to the Reserve Bank Act to challenge them in court, but it is confident that it would win any litigation, a Cabinet spokesman said yesterday.

Finance Minister Pravin Gordhan announced the proposed amendments on Monday. They tighten the rules on shareholding in the central bank in a bid , the government says, to stop the Bank's independence being undermined by private shareholders whom the government claims are motivated solely by profit to the detriment of the national interest.

Chief government spokesman Themba Maseko said yesterday: "Our view is that the process we are implementing is fully in line with existing procedures and regulations."

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.