Company’s AGM floored again

IT might be the largest flooring company in the country, but AltX-listed Accentuate will remain top-of-mind for the fact that it has been embroiled in one of the longest-running shareholder battles on the JSE.

For a second year, Accentuate’s AGM has been mired in controversy with the votes of a significant block of activist shareholders deemed “invalid”. The AGM, held last week, saw the company able to only pass its special resolutions, which need 75% shareholder support, because of its decision to disenfranchise activist shareholders.

These activists are three former executives of Coronation Capital, part of Coronation Fund Managers, who bought 28% of Accentuate in 2010 before clashing with management.

Activist Adolf Potgieter says the JSE and FSB should intervene to protect their rights. Potgieter hopes the regulators will reverse their latest disenfranchisement and he is ready to take whatever action necessary.

The JSE will hopefully be a speedier option than the courts. The parties are still waiting for a court ruling on whether the “letters of representation” used by shareholder activists for the December 2013 AGM were valid.

At that meeting, Accentuate’s chairman Malesela Motlatla declared that those letters of representation were invalid. With their vote neutralised, the special resolutions were passed.

The activists rushed to court for an interdict preventing the special resolutions from being implemented. The court was expected to rule on the matter in September last year but has not yet done so. Accentuate’s AGM was meant to be held in November, but was postponed to the latest possible date in February. This time the declaration of invalidity seems even more contentious. One block of 14.5 million shares, owned by Cron von Seidel, part of the activist grouping, was declared invalid because of technical issues around borrowed scrip relating to nine million of the shares.

Potgieter says the activists tried to use proxies this year to avoid problems. But, controversially, Accentuate ruled that all Von Seidel’s 14.5 million shares were “invalid” — and not just those at the centre of the scrip challenge.

The decision to disallow the shares was confirmed by Accentuate’s legal counsel and announced to shareholders on Friday.