Votes a barometer of a company’s climate

I t’s appalling to consider that until recently, investors on the JSE had to pitch up to the annual general meeting (AGM) of the companies in which they were invested to find out how the voting went. Absentees were told only that all the resolutions were passed by the requisite majority.

Imagine this in the political sphere: “The ANC has won the right to govern the country by the requisite majority.”

It wouldn’t have been tolerated; not even when the National Party was in power.

That investors put up with it for decades is a sign of just how cosy the environment was.

Now trawling through the detailed results of voting at AGMs provides a wealth of information about the inner workings of a company; or at least of how the big shareholders are getting along.

On Wednesday, mining group Tharisa held its AGM at which all the resolutions were passed; some received a remarkable 100% support from shareholders. Inevitably, this meant the few resolutions that were opposed by 20%-plus deserved some scrutiny.

There were three in particular — placing unissued shares under the directors’ control, giving the directors authority to issue shares for cash and the disapplication of pre-emptive rights were all opposed by more than 20% of the shareholders.

This pattern suggests a significant minority is happy enough with the directors, but not so happy that they’ll give them an entirely free rein.

Significantly, the reappointment of external auditors received 100% backing, which suggested one thing: the Public Investment Corporation (PIC) holds no shares in Tharisa.

By contrast, over at Nampak, there was an 11% vote against the reappointment of the external auditors, Deloitte’s. This vote is in line with the PIC’s interest in Nampak. The only other resolution that came up against opposition was the re-election of Phinda Madi. A whopping 36.7% of shareholders opposed her.

Talk of a possible new black economic empowerment (BEE) deal at Vodacom seems to be gaining momentum. This has spurred trade union Solidarity to demand that the country’s biggest cellphone network operator rethink its plans. Solidarity wants the deal to include all races.

While Solidarity says it is not against black ownership, a transformational empowerment programme must be based on “socioeconomical position rather than on an arbitrary ground such as race”.

This is a fundamental departure from the government’s race-biased BEE policy and is directly contradicted by Solidarity’s demand.

In response, Vodacom restated its commitment to BEE.

This is what Solidarity has to come to terms with. If it truly wants its mostly white members to own a part of Vodacom — and not just make a political statement — it could consider the other platforms in which the shares can be bought, albeit without the race-biased discount and lock-in condition.

If the deal happens, it will probably be at group level. This will be Vodacom’s second black empowerment effort. About nine years ago, it sold R7.5bn worth of shares in its South African operations to black groups and the black public. It also allocated shares to staff.

Solidarity is threatening further action and to mobilise and campaign against the deal.