Issue: March 2013 / May 2013
Editorials

GRAVY

No wonder Lonmin is trying to investigate “certain voting patterns and results” at its recent annual general meeting. So it should, since it’s clueless as to the identities of shareholders -- 29% of them – who voted against the remuneration of its directors. This anonymous minority was obviously expressing its displeasure at the way that Lonmin had handled Marikana.

There were also significant votes against the appointment of directors: Roger Phillimore (26%); Jonathan Leslie, David Monroe and Simon Scott, Mahomed Seedat and Karen de Segundo (each 9%); even Jim Sutcliffe (11%) and my old pal Len Konar (28%). Since he didn’t seek re-election, Cyril Ramaphosa avoided similar humiliation.

Then there were 39% of shareholders who voted against the directors’ authority to allot shares. Not exactly a vote of confidence.

The meeting, in London, was well attended. Shareholders represented in person or by proxy cast over 471m votes. Now Lonmin has asked J P Morgan to get from STRATE “the details of uncertificated SA holdings”, apparently assuming that many recalcitrant shareholders are South African. I can save some bother by disclosing that one was the Government Employees Pension Fund.

But it does show up a weakness of shares being held in nominee accounts. Companies must be smacked before they take the trouble to find out whom their beneficial shareholders actually are.

The lovable Jurgen Boyd has moved, or been moved, from his FSB job as head of pension funds to head of collective investment schemes. Which begs the question of who’s to be the next head of pension funds. There is a shortlist.

Knowing what the job entails, I cannot help thinking of the situation described in Catch 22 for fighter pilots: in order not to fly you must prove you’re insane, but applying not to fly proves you’re sane.

To whoever gets the job, may their sanity prevail.

Being away from his regular desk probably explains why Jurgen hasn’t responded to my brilliant suggestion that the FSB obliges all service providers to disclose, when applying to pension funds for administration appointments, all legal proceedings in which they’ve been involved for up to five years prior to their applications (TT Dec ’12-Feb ’13). Because arbitrations are usually under wraps, how else are trustees to know about shenanigans that can materially affect their decision making?

I’d ask the new registrar to consider this. And to go further by having the FSB conduct compliance visits, a few months after litigations and arbitrations conclude, to check that the administrator has learnt from the rulings.

Were only Deon Basson, that most dogged of “forensic journalists” (as he styled himself), still alive to see his years-long investigations into Sharemax vindicated. It was the pressures on him, both from editors reluctant to publish his exposes and from lawyers when they were published, that contributed to his early death.

Investors, including pensioners, ultimately poured about R5,5bn into the Sharemax so-called property syndications. Had the then ministers of finance and T&I listened to Deon, this scam could have been nipped much earlier.

The finding by FAIS ombud Noluntu Bam, that Sharemax was nothing more than a disguised Ponzi scheme, is the most fitting tribute to his memory.