Fund fails to cover itself in glory

PPC feud is keeping all and sundry thoroughly entertained

THE utterly shoddy treatment dished out by the Government Employees Pension Fund (GEPF) to its former chief, John Oliphant, has “stitch up” written all over it.

It beggars belief that Oliphant, who has an outstanding global reputation in terms of pioneering corporate governance practices, has been shafted because of a R2-million contract with an advertising agency. Oliphant, it seems, realised he needed to increase the value of the contract from R535 000 to R2-million to allow the agency to pay for advertising spots.

That he even needed express authorisation to do this is staggering, given that he oversaw a pension fund of over R1-trillion.

Oliphant was suspended in October last year in a process that seemed murky and riddled with hidden agendas.

The results of an inquiry were finalised in July, and the new GEPF board met in October to discuss the findings.

Early this week, GEPF employees were summarily informed that Oliphant had been dismissed.

Oliphant then had to fight to even secure the right to appeal both the findings of guilt and the sanction of dismissal. That appeal is currently in play.

The saddest aspect of all this is that there are many excellent people in the GEPF and at its fund manager, the Public Investment Corporation.

But it’s unfortunate that some of the key people driving the two organisations have lost sight of the corporate-governance objectives that helped to transform these formerly stodgy government-controlled entities into modern money managers.

The manner in which they have dealt with Oliphant must raise questions about their ability to play the role of major shareholder in corporate SA with any integrity, given that the PIC controls more than 11% of the JSE.

Further proof that the PIC has lost its way is evident from its website, which still lists Elias Masilela as CEO. Masilela left the organisation in July. And then there’s the issue of AGM voting records, which are now looking extremely dated. The 21st century seems a long way away.

PPC dogfight

The “my directors are better than yours” battle playing out at the PPC is not the first time that section 61 of the Companies Act has been used — and it’s not even the first time it has been used to call a special shareholders’ meeting to remove directors. The highly contested PPC battle is, however, the highest profile use of this section.

But back in February 2012, a shareholder with 27% of ConvergeNet issued a section 61 demand to the company in a bid to get rid of key directors.

As with PPC, the incumbent board greeted the request with considerable hostility, perhaps understandable given that it would mean their jobs would be on the line.

Two follow-up letters and threats of legal action were required before a meeting of ConvergeNet shareholders was called. Eventually, this meeting was held on June 12 — around four months after the initial request.By that standard, the PPC board is acting promptly and, given its bid to sidestep any Post Office-related delays, with commendable vigour.

It is difficult to imagine that the next four weeks will see a continuation of the remarkable pace of “campaigning” that we have seen from the two PPC camps this week.

It’s been little short of a US presidential battle in its intensity, pitting Ketso Gordhan against chairman Bheki Sibiya.

Of course, the charges and counter-charges have done little to enhance the reputation of either side. It has, however, been hugely entertaining for those on the outside.

But one wonders if the parties will rue what they did during the heat of battle once the dust settles and sanity prevails.

Annual general meetings

Talking of entertainment, the detailed disclosure of AGM voting is providing excellent insight into the quality of shareholder engagements with their companies.

For instance, only 56.4% of Comair’s shareholders bothered to attend this week’s AGM — and every one of them voted in support of every resolution put to the meeting. Not much sign of shareholder activism there.

Things were much more exciting at Northam Platinum, where 87% of shareholders attended the meeting.

There, an impressive — and possibly unprecedented — 40% of shareholders voted against the group’s remuneration policy. It is only an advisory vote, of course, so nothing much hangs on it . . . unless the board ignores the strong signal shareholders are sending.

But what Northam’s board won’t be able to ignore is the 28.5% vote against the general authority to repurchase shares. That was a special resolution, and so has not secured sufficient support to be passed.

But the award for best AGM this week goes to Imperial, where new CEO Mark Lamberti has really gone out of his way to ensure that AGMs are handled with the considerable respect they deserve.

In the SENS announcement outlining the results, the board has provided detailed information on its useful engagement with shareholders and proxy advisers.

Seventy-seven percent of the shareholders attended the meeting and the results reflect an impressive level of engagement.

Water from the skies

It looks as though the Irish have been pushed a little too far. They didn’t mind the ECB and World Bank running the place, but plans to charge for water, in one of the most rain-soaked countries in the world, have brought hundreds of thousands of them out onto the streets in a rolling mass-action campaign.

So vehement is the opposition that one frustrated MP was heard to say, “do they think it all just falls out of the sky”? Before hastily adding it had to be put into pipes and all that. Hopefully, the Springboks were warned of the more aggressive mood pervading the country.