THEO BOTHA has by and large become the face of minority shareholder activism in South Africa. BERNARD MPOFU
The man seems to be on a mission. He opposes anything resolved by the men and women in suits in corporate boardrooms which appears to trample upon his interests.
With investments in a couple of Johannesburg Stock Exchange-listed companies, Botha has become that shareholder any business executive ought to listen to.
He has on many occasions taken executives to task on matters relating to good corporate governance, ethics, environmental practices and black economic empowerment.
Botha, whom reports say hardly owns more than a single stock in any company, has also criticised South African corporate governance guidelines as too lenient.
The list of companies Botha has confronted include The Sage Group, Sappi, Absa, Sasol, SABMiller, Pick n Pay Stores Limited, Tiger Brands, Avusa, Anglo Platinum, Pretoria Portland Cement Company, Mutual & Federal, Bidvest, Wesizwe Platinum, and Liberty Holdings Limited.
Back home most annual general meetings and corporate activities have become choreographed, rehearsed functions where the predominantly common non-executive boards have mastered the art of rubber-stamping decisions taken by management.
Market watchers say most of these board members, who often take sides with management rather than take an oversight role, do not own a share in these companies.
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Hardly do you find a corporate event where you see shareholders demanding answers for pertinent issues affecting their companies.
Any dissent has mostly been met with dodgy answers.
For some who have never enjoyed the fruits of their investments in a capital-starved economy, declaring dividends has only been the prerogative of the board and management despite improved performance of the company.
The level of disclosures made by companies undertaking major decisions has often come under the spotlight with regulators merely raising the red flag, but taking no remedial action.
What could be the reason for that? Experts contend that the pieces of legislation regulating the country’s capital markets need immediate changes as they seem vague and archaic.
The Securities Commission of Zimbabwe (SECZ) last year raised concerns after a consortium of local and foreign investors who bought a controlling stake in Murray & Roberts (now Masimba Holdings) after the South Africa-headquartered parent company sold its shareholding.
Information gathered by this paper last year suggested that some aggrieved shareholders, who clearly could take on management head-on, approached the capital markets regulator raising questions on how the deal was conducted.
Zumbani, a consortium made up of M&R Zimbabwe former chairman Paddy Zhanda, former M&R Zimbabwe chief executive officer Canada Malunga and international partners Malcom McCulloch, which represent Carlmac of South Africa and Brait, an international investment group, bought 99 792 515 shares at a special bargain price of $0,0147 per share. The special bargain price was at a 79% discount to the last traded price of the share, $0, 07.
In a clear admission of flaws in the law, government has already crafted the Securities Act Bill, which among other reforms, will grant the Securities Commission more teeth to bite.
While this has characterised most corporate functions, a few investors with interests in listed companies on the Zimbabwe Stock Exchange (ZSE) have in the past pitted fights with management and anchor shareholders in one corner against the minority shareholders.
British tycoon Nicholas van Hoogstraten has become that investor most executives would love to hate.
Van Hoogstraten, regarded as one of the most active individual investors on the ZSE with significant interests in at least 12 counters, including Old Mutual, PPC, Rainbow Tourism Group and Hwange Colliery Company, has made news headlines over the past years.
His relentless push to put his money where his mouth is has on several occasions led him on a collision course with various boards.
Other shareholders have been left edgy due to his demand for answers.
He has a bone to grind with executives who live lavish lives, buying their spouses top-of-the-range cars when the companies are bleeding. The delisting of Lifestyles Holdings has widely been reported as a case were minorities where handed a raw deal.
The country’s capital markets regulator, which admitted that it currently has no powers to fight from the minorities’ corner, openly challenged the development and the level of disclosure.
Zanu PF activist Chris Mutsvanga, who also has interests in Lifestyle Holdings and the SECZ jointly, lost their bid to challenge the holding of a scheme meeting convened by the group mid this month.
The group’s founder and majority shareholder Tawanda Nyambirai backed by his proxies, prevailed.
When all is said and done one cannot stop thinking that maybe time will tell that the majority is not always right!
