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Arrogance or simple obtuseness?

We need an ‘arrogance meter’ for listed companies.

Arrogant is a nasty word. Not one that I’d use easily, partly because it gets quite personal and I’m really interested in the principle and the practice of doing the right thing.

But you do from time to time have to ask yourself questions like:

  • When does keeping secrets from shareholders become misleading them?
  • When is a mistake or non-disclosure not an excusable mistake?
  • How can you be a leader in disclosure and “forget” to publish a report?
  • When is it acceptable to discuss a matter “offline” only, rather than in the AGM?
  • When is it acceptable to refuse a point for discussion at an AGM?
  • If a [promise of a] report-back on a serious information request proves to be untrue, what does that imply?


The complete Oxford Dictionary defines the word ‘arrogant’ in part as “… aggressively conceited or haughty, presumptuous, overbearing”.

How close are the following to arrogance?

Case 1

Steinhoff considered and then agreed to a transaction that could change its whole corporate strategy and is a game-changer for South Africa, valued at some R63 billion. But it did not advise its shareholders that a transaction might be in the offing. That’s OK, it said, because the news did not leak. Ahem. Tell that to the shareholders who sold almost 3 million shares to various Steinhoff individuals during the process, without knowing something was in the offing, and who might have chosen to wait until the news was out…

Case 2

JD Group decided to flout the King III/JSE guidelines and not divulge in its annual reporting that it has received a Public Access for Information Act (PAIA) application. What the heck? I suppose it’s just a King III/JSE guideline, after all! Except that the company got caught out on this at its AGM, in full view of the world. Minus one for reputation.

Case 3

Sasol decided to publish its sustainability report, not days ahead along with its other annual reports, but only 41 hours before its AGM. “Sorry, we forgot,” I suppose. So what if shareholders and other stakeholders actually would like to discuss this at the AGM? Of course the closing time for proxies to be registered is 48 hours before the AGM…

Case 4

JD Group prefered not to discuss anything related to emolument attachment orders (garnishees) during the course of its AGM. “Mr Botha… but if you’d like we can discuss it later, elsewhere, offline… so much easier, you know, so much more comfy!”

Case 5

The same JD chairman, Vusi Khanyile, did not want to allow discussion on a point raised by a shareholder (in this case, the lack of transformation) at the AGM. Nope. Notwithstanding the pretty clear ruling in Section 61(8)(d) of the Companies Act: “A meeting convened in terms of subsection (7) must, at a minimum, provide for the following business to be transacted: (d) any matters raised by shareholders, with or without advance notice to the company”.

Strange, this one.

Case 6

At Sasol’s AGM on November 21 2014, we were told that there were two PAIA (Public Access to Information Act) applications. But sorry, Mr Botha, we can’t recall what these were. Could we please discuss this later?

Well, later Sasol stated that it had acceded to one and refused the other. Fair enough, thinks NGO Centre for Environmental Rights (CER): since we were one of them, the other guys must have won through, and we didn’t (because we know that we didn’t get the details of the Atmospheric Emission Licence (AEL) that we asked for).

Surprise, surprise! A further question brings up the response that the PAIA application that was refused, is another one, from a former staff member. So, then? Well, Sasol effectively states that it did accede to the CER application. CER disagrees, vehemently, and sends us copious e-mail messages and copies of redacted responses as evidence. We’re still trying to find out how this strange difference works; but it certainly looks as if Sasol put a spin on this one… and would not have been found out unless a naive question was taken further, one step at a time.

Frankly, how do you forget what a very serious PAIA application was about, especially if this one started in June 2013?

I rest my voice. A colleague has wanted to develop an ‘arrogance meter’ for many years. He thinks it could be a good indicator of which companies to avoid, investment-wise. I’m not sure there would be many choices left out of our Top 100…

(Theo Botha and Charl Kocks are partners at CorporateGovernance.Pro, part of the team that produces Proxy View, a service for individual shareholders of listed companies to help them decide how to vote. Follow Theo on Twitter: @tjbbotha)



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