SHOPRITE’S R2BN GIFT TO BASSON IS NOTHING BUT DAYLIGHT ROBBERY

COSATU condemns Shoprite’s gift of R2 billion worth of shares to for mer group chief executive Whitey Basson. According to Shoprite’s JSE disclosure and Moneyweb, the company will be buying shares worth about R1.8bn from Basson. It is reported that in 2003 he bought shares in Shoprite at R10 each and this month the share was worth R211, when he exercised his options to sell the shares.

Cosatu condemns this daylight robbery and calls for more regulation to stop the abuse of share options by executives. This clearly shows that left to its own devices the market will continue to enrich the rich.

There should be maximum wages or compensation for directors. It is immoral to have a chief executive earning R1m per month while a worker earns a R2 000. This also shows that our corporate governance should be transformed o ensure that the interests of companies, chief executives and society are aligned. Cosatu demands there should be limit on maximum salary for executives.

As a country, we cannot rely on shareholders to enforce good ethics as they do not have adequate information and are usually not interested in what is paid to the chief executive as long as they receive their dividends.

Last year, Basson was paid R100m, of which half was his bonus. Usually workers are told to settle for wages at or below inflation, while the likes of Basson are able to enrich themselves at the expense of the workers.

Cosatu demands the Gover nment Employees Pension Fund, which holds 11.05% of Shoprite’s shares, must reject the repurchase agreement as it is morally unjustifiable. The directors who approved it in 2003 should be investigated and declared delinquent for unjustifiably exposing Shoprite to a huge and unjustified liability for Basson’s shares.

Sizwe Pamla Cosatu national spokesperson