PPC's constitution complicates meeting
The special shareholders’ meeting of PPC, set for December 8, is complicated by a controversial section of PPC’s memorandum of incorporation, as well as a Competition Tribunal order affecting the Public Investment Corporation’s (PIC’s) right to vote its 12% stake.
The shareholders’ meeting was called by asset manager Foord and Visio Capital Management, who held at least 10% of PPC, to re-elect a new board following a public spat that saw Ketso Gordhan quitting as CEO in September.
Foord was forced to call for the removal of all PPC’s directors because of a clause in PPC’s constitution, which says: “Shareholders will not be entitled to propose directors for nomination to the board, unless there are no directors of the company.”
Charl Kocks, the CEO of Ratings Afrika, describes this as “extremely unusual” as it deprives shareholders of “one of their very basic rights”.
That section was approved by PPC’s board and the JSE in June 2012 – but less than two months later, the JSE amended its listing requirements to block that sort of clause.
Now, in a further twist, it is possible that even major shareholder PIC’s right to vote at the meeting will be challenged.
In December 2011, after the PIC bought a controlling stake in rival cement firm Afrisam, the Competition Tribunal ruled that for as long as the PIC controlled Afrisam “it shall not have any board representation on PPC or any other cement producer in South Africa”.
By Ann Crotty