Premier Group may have set a record for the shortest annual general meeting of any JSE-listed company since the 2008 Companies Act was implemented. But in doing so it deprived at least one shareholder of their ability to vote, which could call into question the validity of the meeting.
Active Shareholder, a not-for-profit company that helps socially responsible investors to exercise their company rights, is writing to the Companies and Intellectual Property Commission to find out what can be done about not being able to vote at the Premier Group AGM last week. They are also seeking clarity on the combining of all resolutions into one proposal, which significantly speeds up a meeting, but which was the source of Active Shareholder’s voting problem.
AGMs generally last anything from 30 minutes to over two hours. Premier’s AGM lasted just 18 minutes. When you allow three or four of those minutes for the formalities, what you’re left with is the equivalent of speed-dating for investors.
Of the 14/15 minutes left, 10 were spent rushing through the answers to 12 questions from shareholders. Indeed, the board was in such a hurry, it was unwilling to wait until shareholder Chris Logan had typed in his question. That question was left to be addressed privately after the meeting.
Inevitably, with the emphasis on speed, the quality of the answers left much to be desired. Rod Bulman, Active Shareholder’s voting agent, said the board seemed determined to avoid discussion of any controversial matter.
Totally inadequate
So determined that no shareholder was allowed to address the meeting. Shareholders could only communicate in writing, which as Logan proved, was totally inadequate.
The most obvious controversial matter to be avoided was Premier’s proposed closure of the Tulbagh Cannery. First announced at the end of July, this is set to result in the loss of hundreds of permanent and thousands of seasonal jobs.
Bulman told the FM one of the reasons they were keen to attend the meeting was to get more clarity on the board’s thinking behind the move. “It was quickly evident they did not want any discussion on the issue; they were very keen to avoid it,” he said. The board did answer several questions on the closure, but didn’t provide for any response from shareholders.
Bulman argues that he’d put a lot of effort into preparing for the meeting and had sent the board questions beforehand but had also made clear he wanted to speak at the meeting before voting on the various resolutions. Well, so much for that.
Not only were his questions not fully dealt with, Bulman was given no opportunity to speak at the meeting.
Worse was to come.
About 16 minutes into the meeting, chairman Iaan van Heerden reminded shareholders that the company’s memorandum of incorporation provided that voting should be conducted by way of a poll, “and each shareholder in the company, whether present in person or represented by proxy, is entitled to a vote for every share held”.
Seconds to vote
This was merely confirmation that Premier abided by the law. Section 63(5) of the Act states, “any member including his or her proxy, must be entitled to exercise all the voting rights attached to the shares held or represented by that person.”
All of the resolutions had been seconded, so “kindly take this time to record your votes on the polling form for all special and ordinary resolutions,” said van Heerden.
Then came the astonishing part. About 30 seconds later, the chairman stated confidently that as all the resolutions had been put to the meeting, the scrutineer would now count the votes.
This meant voting was closed, seconds after it had been opened. Bulman was flabbergasted. He hadn’t voted ahead of the meeting as he’d wanted to hear the board’s discussion of the Tulbagh closure and the CEO remuneration.
“I was expecting each resolution to be put to the meeting individually, as is usually the case” Bulman tells the FM. “No-one had informed me of how the voting was going to be carried out, that I would have only a matter of seconds to fill out the polling form. It was impossible.”
Bulman is particularly aggrieved as he’d sent in questions ahead of time, as well as a letter requesting to be allowed to speak at the meeting.
He acknowledges their votes would not have changed the outcome of any of the resolutions but says a democratic process is supposed to ensure a right to vote. “The chairman confirmed that right when he referred to the company’s MoI.”
Little point
Certainly, there was no danger of any of the resolutions being blocked. As usual the vast majority of shareholders (Christo Wiese’s Titan Premier Investments, Brait and Allan Gray) had submitted their votes ahead of the meeting. An impressive 90.5% of shareholders were represented and voted overwhelmingly in favour of all the resolutions. The only sign of resistance was to both remuneration votes as well as the general authority to issue shares for cash.
Bulman now plans to approach the Companies and Intellectual Property Commission for clarification on the matter. “If this is how listed companies are going to operate in the future, we need to be prepared,” he says.
The Companies Act specifically refers to shareholders being given a reasonable opportunity to participate and vote at a meeting.
One company law expert tells the FM if this is how firms are going to operate in the future, there’s little point in holding meetings.
While he believes that regulators would be loath to invalidate the Premier meeting, he argues they do need to enforce some minimum acceptable standards. “Companies are required to be reasonable; what the Premier board did at their meeting was not reasonable. They made no effort to warn shareholders that they’d have very little time to cast their vote.”
