A few feathers were ruffled at the ordinarily calm Naspers AGM on Friday, causing a former director to walk out and suggest other shareholders follow and chairman Koos Bekker to threaten to evict an activist shareholder from the meeting.
The activist shareholder was none other than Theo Botha, who as usual came to the AGM armed with a list of technical questions. The question-and-answer session didn’t end well and Botha is now exercising his rights as a shareholder of Naspers.
Over the course of the last year, Botha engaged with company secretary Gillian Kisbey-Green in an effort to access documentation that was made available to shareholders ahead of the AGM in 2015. This was the share trust deed relating to the company’s long-term share incentive scheme for middle management and was relevant to a particular resolution being voted on at the AGM.
Botha, who became a shareholder after the AGM, was denied access to this information on the basis that the window period for viewing the documentation was closed and the company would not entertain exceptions. He maintains that this is “unfair, unreasonable, non-transparent and goes against the fundamental principle of good governance where all shareholders should be treated equally.”
A second request, made last week was also denied.
At the AGM, Botha attempted to engage Bekker on the reasons for denying access to the documentation. Bekker referred the questions to Kisbey-Green who referred to her previous correspondence with Botha, saying that the requested information was “not a public document”. She added “we don’t want to make exceptions. We have extensive disclosure in our annual report and the share scheme is available in the financial statements.”
It was when Botha attempted to point out that Naspers’ refusal to grant him access to the documents runs contrary to the company’s own memorandum of incorporation (MOI), that the fun began. In particular, the MOI states that Naspers shareholders have the right to inspect and copy certain of its company information. This includes “any document that was made available by the company to the holders of securities in relation to each such resolution”. To read the MOI, click here: Naspers memorandum of Incorporation. The relevant section is on page 20, under ‘Access to Company Records’.
Bekker flatly refused to entertain the question, arguing that it had already been answered and that if he [Botha] persisted with this line of questioning he would have him thrown out of the meeting.
At this point, another shareholder, Boetie van Zyl (Naspers’ former head of the audit and risk committee) said that as a shareholder he was “not interested in listening to these types of questions”. He staged a walkout and invited other shareholders to join him.
As a result of these events Botha resorted to formal mechanisms to exercise a right that should be available to him. A letter to Naspers CEO Bob van Dijk from attorney Adam Pike makes a formal request for the documentation in terms of Section 26(4)(b) of the Companies Act. The request for access to information can be read here: CoR 24 Naspers Limited.
The letter also notes that in terms of the Companies Act, “it is an offence for a company to fail to accommodate any reasonable request for access, or to unreasonably refuse access, to any record that a person has a right to inspect.”
Naspers has two weeks to respond.
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