EOH declines on shareholder concerns

EOH has fallen 17.6% since last Thursday, when shareholder votes at its annual general meeting indicated major discontent.

Analysts said the sell-off was compounded by a report from Africa News 24-7, which is controlled by businessman Kenny Kunene and former Sunday Independent editor Steve Motale, which claimed that EOH staff were implicated in a bribery case.

Business Report later ran the same story, but both publications removed their articles as they were deemed false.

At the meeting, 15.4% of shareholders present voted against CEO Zunaid Mayet’s appointment as a director. At least a quarter voted against six other appointments. Two audit committee members received similar opposition, while EOH’s remuneration policy was approved by 55.8% of shareholders. Many said EOH should not issue more shares.

Peter Takaendesa, a portfolio manager at EOH shareholder Mergence Investment Managers, said he voted against the remuneration policy as it did not incentivise management to boost investor returns. He also voted against allowing EOH to issue new shares as “you cannot issue shares at these prices, you’re just locking in dilution”.

Takaendesa said he was “disappointed” that EOH had not engaged shareholders about the replacement of Grathel Motau as chairwoman and member of the audit committee. Motau resigned before the meeting.

“So effectively the audit committee went from four members to three and there was no communication as to what’s next,” he said.

Two of the remaining audit committee members did not have an accounting background, so it would have been “preferable” to appoint a skilled replacement for Motau.

EOH said it was not able to respond on Tuesday.