INVESTOR FURY AT EOH

During EOH’S glory days, investors could afford to overlook poor governance. Now that the bubble has burst, they’re taking a stand

Zunaid Mayet, the CEO of struggling technology firm EOH, admits he is “concerned” by signs of shareholder discontent at last week’s AGM. He should be, given that it’s such unfamiliar territory for EOH. For years the company was one of the shooting stars of the JSE, its share price ticking up almost as frequently as founder Asher Bohbot announced another megadeal. Profits grew by 30%-40%/year, and R10,000 invested in EOH in 1998 grew to R640,000 by 2016.

Then the music stopped. With the share price falling, EOH couldn’t use its high-valued shares to buy companies. It had to embark on the far more mundane business of actually managing existing businesses.

So far it hasn’t exactly been a triumphant re-adjustment. Over the past year, EOH’S share price tumbled 70%, as it became apparent that some of its earlier purchases had been pretty shoddy buys.

So it wasn’t surprising that at last Friday’s AGM, shareholders vented their anger on the ballot.

First up, 44% of investors voted against EOH’S remuneration policy and how that policy is being implemented — an astounding repudiation, rarely seen at any AGM of a Jse-listed company.

A number of EOH’S directors got a large thumbsdown from shareholders — also an untypical act at an AGM. For example, executive director Jehan Mackay got a 38% “no” vote for his re-election, as did audit committee chair Rob Sporen, while 33% voted against Johan van Jaarsveld, Brian Gubbins and Ebrahim

Laher. Even Mayet himself got a 15.4% “no” vote.

Speaking to the Financial Mail afterwards, Mayet

At the AGM, 44% of EOH shareholders voted against the pay policy, while several directors also got sizeable ‘no’ votes