GPI dissenters await meeting
Shareholders in Burger King SA master franchiser want new directors
Dissenting shareholders pushing for directorate changes at Grand Parade Investments (GPI), which holds the master franchise for Burger King in SA, were left frustrated this week when an extraordinary meeting was adjourned before shareholders could vote.
Dissenting shareholders pushing for directorate changes at Grand Parade Investments (GPI), which holds the master franchise for Burger King in SA, were left frustrated this week when an extraordinary meeting was adjourned before shareholders could vote.
The extraordinary meeting on Wednesday had been called by the discontented shareholders so they could vote on the appointment of four new directors they hope will bring new skills to the table as the empowerment investment holding firm, which holds gaming and food interests, has lost 68% of its share price value since reaching a high of R7.65 in 2014.
Jarred Winer, a representative of one of the disgruntled shareholders, told Business Day it was evident from the meeting there was a lot of support for their intervention. Hundreds of shareholders were in attendance. “We’re looking at ways to take this forward,” said Winer.
On Thursday the company told shareholders it would let them know by Friday of the time, date and venue of the adjourned meeting.
The meeting had been called by holders of 12% of the GPI shares, who hoped to halt the share’s value destruction by introducing new skills to the board. Ahead of Wednesday’s meeting, the shareholders, including Kagiso Asset Management, Denker Capital and Westbrooke Alternative Asset Management, had met with GPI founder and executive chair Hassen Adams several times over the past 18 months in a bid to deal with their concerns.
The dissident shareholders argue the board does not have the necessary skills to manage the food assets the local franchise of Burger King, Dunkin’ Donuts and Baskin Robbins they had purchased with the proceeds from the sale of part of their stake in the GrandWest and Golden Valley casinos.
The food businesses have accumulated capital expenditure and operating losses of about R1.4bn since 2014.
At the start of the meeting, the group’s finance director, Colin Priem, informed shareholders he would be standing in for Adams, who could not attend as he had taken ill earlier that day. For the ensuing hour or so shareholders quizzed the board about the purpose of the meeting and said they had no information about the concerns of the dissident shareholders.
Several of the shareholders, who had been invested in the company since its inception in 1997, expressed concerns about the direction of the company since it had sold down its gaming assets. Kaushik Gihwala Bhikha said the gaming assets were subsidising the food businesses, which he described as a bottomless pit.
Nonexecutive director Alex Abercrombie protested that the resolutions being put to the shareholders were “irregular” and said the long-serving directors had not been given reasons why new directors were being nominated in their place.
The dissenting shareholders attempted to explain to the other shareholders that they had not been given an opportunity to communicate directly with them. “We weren’t even allowed to send a letter to the shareholders,” said one of the dissenters.
On Thursday, the company said the adjournment would allow for more information to be provided to shareholders “in relation to the reasons for the proposed resolutions and the relevant nonexecutive directors’ response, before the proposed resolutions are voted on”.