Shareholder anonymity defies core UN principle
August 13, 2009
VOTING at annual general meetings (AGMs) is not like voting at an election. So the prospect of a call from someone acting on behalf of SABMiller, to find out why you voted in a particular way at last month's AGM, is probably not as scary as a call from President Jacob Zuma or DA leader Helen Zille trying to find out how you voted in April.
Anonymity at an election is a central tenet of democracy and is critical to its success. At an AGM, anonymity is the unintended consequence of a variety of issues such as apathy, the widespread use of nominee shareholder accounts and the complexity of the structures.
Pick up the annual report of any listed company and you will struggle to discover who the shareholders are. Attend an AGM and you will be none the wiser. Some fund managers claim anonymity is important because it prevents would-be copy cats from replicating the share portfolios of the better performing managers.
But other than this dubious claim, it is difficult to see why the ownership of public companies should be shrouded in mystery, which makes it extremely difficult to hold anyone accountable.
It should be easy for the management of a listed company, as well as the public, to ascertain who controls the shares and how that control is exercised at the AGM.
This is a core requirement of the UN's Principles for Responsible Investment, to which there are scores of signatories in this country. To date the only fund managers that take it seriously are Element Investment Managers (previously Frater Asset Management) and the Public Investment Corporation.
SABMiller shouldn't have to use a well-resourced investment adviser to wade through the layers of anonymity and it shouldn't look quite as sinister.
Maize to whisky
There was a time, according to Andy Watts, the master distiller at Distell's Wellington distillery, when whisky meant Scotch in South Africa.
More recently the lighter Irish whiskey has made its appearance here. But this country is still Scotland's sixth-largest market for its most famous export.
Some of us can remember hearing the news that the Japanese had begun to make whisky, news that was greeted with hilarity by the Scots and other drinkers with conservative tastes.
But whisky fundi and travel writer Graham Howe, the wine and food editor of Habitat, assured Business Report that whisky was made across the world with "excellent whiskies from Japan to Tasmania".
So, he asked: why not South African whisky? The country is now in on the act and Distell, which has been making a quite successful variety in the Scotch style for some time, has launched a distinctive South African premium whisky - although with a Scottish name.
It has given a sample bottle of its new single grain whisky to a bar at Cape Town's Waterfront specialising in whisky - with more than 390 varieties in stock - for connoisseurs there to taste.
It has a new classification, Cape Mountain whisky, and the grain from which it is distilled is a local staple, maize.
According to Watt, whisky, like wine, reflects the vegetation and other influences of the area in which it is made.
It will be interesting to see how it is received by Scottish and other foreign visitors to South Africa in the coming season, particularly during the World Cup.
Fighting fit
You know a row has turned venomous when squabblers leak information to the media. The fight at Old Mutual South Africa (Omsa) allegedly pits senior black managers against the de facto white management led by Diane Ridley, the chief financial officer, and Michael Harper, the managing director of customer relations.
An informant said five top black executives wanted to resign because they were overlooked when Kuseni Dlamini, the former chief executive of Anglo American South Africa, was appointed chief executive of Omsa. He said the board had appointed Dlamini believing that Ridley and Harper would do the job of running the company in his stead.
But he said these top executives, who had experience in the insurance industry, could run the company with little or no operational assistance. It is difficult to say whether rumours of a mass exodus from the company are true because companies tend to deny claims that turn out to be true.
It is our sense that some executives are not happy with the appointment of Dlamini because they think they have more financial services experience. They can get jobs anywhere at any time, which makes it easy for them to resign.
Sinking feeling
While South Africa's policy makers agonise over inflation - which at 6.9 percent remained above the Reserve Bank's 3 percent to 6 percent target range in June - the Bank of England (BOE) is concerned that inflation could undershoot its target.
In June, UK consumer inflation stood at 1.8 percent. And yesterday BOE governor Mervyn King predicted it would slow below 1 percent and stay below the bank's main 2 percent target for the next two years or more, if the bank attempted to raise its benchmark lending rate from its current historic low of 0.5 percent.
The UK is not the only country more concerned about deflation than inflation. In Portugal prices fell 1.4 percent in June; and in Japan, in the Tokyo region prices fell by 1.7 percent that month.
In France prices fell 0.8 percent year on year in July and in China 1.8 percent.
Perhaps, in time, South Africa will be able to dilute its inflation with some imported deflation and settle below the target ceiling. page 12
Edited by Ethel Hazelhurst. With contributions by Ann Crotty, Audrey D'Angelo, Mzwandile Jacks and Ethel Hazelhurst
|
|
