Barefoot shareholder activist takes Reserve Bank to task
September 18, 2009
By Ethel Hazelhurst
Governor Tito Mboweni's address at the South African Reserve Bank's annual general meeting - click here to download full document
The man who sees himself as a central bank hunter is targeting the SA Reserve Bank. Michael Duerr, a German national, sporting a beard, a backpack, deer leather lederhosen and bare feet, disrupted the bank's annual general meeting (AGM) yesterday.
Duerr, who together with his family holds about 5 percent of the bank's shares, has been prevented from accumulating a bigger holding because no shareholder may own more than 10 000 shares. And as a non-resident, he was not allowed to vote his shares at the AGM, which was attended by 42 shareholders.
Duerr is now pressing for the bank to be nationalised.
He interrupted the meeting within minutes of its start, with a number of complaints, including allegations of a R1 billion discrepancy in the Reserve Bank's figures and demanded that the subject be opened to discussion.
"I want to know what the hell is going on," he said.
After an interchange with Duerr on this and a number of other issues, governor Tito Mboweni suspended the meeting so votes could be cast on proposals on the agenda.
Despite Duerr's objections, about 66 percent of the votes were in favour of adopting the bank's annual report.
At a press conference after the AGM, Mboweni said the bank would not be nationalised. And he refused to comment on how shareholders would be compensated if it were to be nationalised.
"We are not going to spend time making fools of ourselves considering it," he said, complaining that Duerr had shown disrespect to South Africa by appearing at the AGM with bare feet.
Though the governor and his deputies are appointed by the president of the country, the Reserve Bank is one of only seven central banks not owned by its government, according to Johann de Jager, the head of legal services at the bank.
It has 623 shareholders who hold 2 million shares in total and receive a dividend of 10c a share, as prescribed under the Reserve Bank Act, while the surplus is paid to the state.
The bank delisted from the JSE in 2002 because it could no longer comply with the listing requirements. Shares are traded over the counter and the last trade recorded on the bank's website was 6 300 shares, which traded at R10.20 each. The shares have a nominal value of R1 each.
At the end of March the Reserve Bank and its subsidiaries had assets valued at just more than R353bn and reported a profit of R1bn.
Mboweni and other bank staffers pointed out that the bank was not a normal company accountable to its shareholders. People who bought shares should not do so to make profit as the central bank, which has powers to supervise financial institutions, could not compete with them in the market.
De Jager said Duerr and other dissenting shareholders did not understand that their rights were not the same as those of shareholders in normal companies. Shareholders have limited powers, which are set out in the Reserve Bank Act, and their role is to represent the community by appointing a director to the bank's board.
Last year Duerr told Business Report he acquired the shares to help him in a battle to prevent a nuclear power station from being built adjacent to his property in Gans Bay in the Western Cape. However, he subsequently sold the property and is now using his shareholding to campaign against the bank's management.
"Things are not in order at the Reserve Bank and I am a shareholder activist," he said.
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