Minnows and sharks at BBS moment of truth
A large proportion of BBS Limited’s shareholders gather this morning at Avani Hotel, following three weeks of a highly bitter boardroom battle. The first item on the agenda will be whether the meeting should go ahead or be adjourned, report Staff Writers, MBONGENI MGUNI & MPHO MOKWAPE
Botswana Building Society (BBS) shareholders today finally have their say in the troubles that have rocked the building society in recent weeks. Ever since a highly public brawl broke out pitting managing director, Pius Molefe and company secretary, Sipho Showa on one side and the seven non-executive directors on the other, shareholders have watched, mouths agape, as a flurry of accusations, denials and counter-accusations have flown daily between the two camps.
The fight has reached the High Court and the Industrial Court, spilt over onto control of the building society’s social media and become a dream come true for students of corporate governance furiously taking notes of the real time case study happening before their eyes.
Technically, according to documents filed in court, the Botswana Stock Exchange and on social media, the battle is over five non-executive directors’ attempts to extend their terms beyond today’s AGM, something Molefe has legal opinion stating is both unconstitutional and unlawful. Five retiring directors have put themselves up for re-election and further argue that the renewal of their terms should be automatic. Molefe says new nominees, chosen by shareholders, have thrown their hats into the race to challenge the outgoing directors.
The managing director has said shareholders should have the final say which board they want. The directors have questioned where the new nominees came from and of late, have also challenged the notice given to shareholders for today’s meeting, saying procedure was flouted and a vote on adjournment should be held.
That’s the technical issue at hand. However, those in the know say, at its essence, the fight is about which team will lead BBS into its long awaited era as a commercial bank.
The 14,776 BBS shareholders, of whom at least 6,000 are expected to cast votes at the AGM, will have to decide whom they believe can take the building society into its new era as a commercial bank, between the current directors and the new nominees.
Whether minnows or sharks, each shareholder will have an opportunity to vote for the team they prefer. The first item on the agenda, according to board chair, Pelani Siwawa-Ndai, will be the question of adjourning the AGM as it is improperly constituted.
“At the commencement of the AGM the chairperson of the meeting will ascertain if the shareholders are in a position to waive the irregularity of the AGM notice,” reads a statement to shareholders issued late Thursday afternoon.
“The board is of the view that this is unlikely as the method of providing the notice of the AGM in the first instance dictates that a large number of shareholders did not receive notice of the AGM as required by the BBS constitution and the Companies Act.” For his part, Molefe says an adjournment of the AGM will result in continued instability taking management away from critical tasks which include submitting the banking licence in May.
“The application could have been submitted in April 2021 were it not for the corporate governance challenges which are now public knowledge,” he said in a statement responding to Siwawa-Ndai.
“The non-executive directors are not prepared to highlight their irregular corporate governance at the AGM as confirmed by the High Court and acknowledged by them elsewhere.
“It will be up to shareholders to determine whether the non-executive directors have the moral authority to complain about any alleged irregularities in the notice after all that has happened.”
Authoritative sources following the BBS saga say it is unlikely the shareholders will approve an adjournment. Already, an influential shareholder, Pusetso Morapedi, executive director at the Botswana Centre for Public Integrity, has sued demanding that the AGM be held with its planned agenda. Lobatse High Court Judge, Mercy Garekwe is set to deliver judgement today, the same day as the AGM.
“Surprisingly, the board did not oppose Morapedi’s suit and only argued costs.
“It is therefore, now bizarre that the board is again fighting to adjourn the meeting when it had indicated no opposition to Morapedi’s lawsuit.
“Shareholders honestly are exhausted with this battle and want to vote, preserve the value of their investments and get on with life,” one source close to the developments says.
Siwawa-Ndai, in her statement today on behalf of the board, says non-executive directors want to adjourn the AGM by at least 45 more days to provide room to properly comply. Molefe says shareholders have the discretion to decide the direction of the meeting, but it will be in their interests to ensure decisions are made and normalcy returns as quickly as possible to BBS.
The BBS moment of truth has arrived.