GPI: The mother of all AGMs

Fin24 joined a 20m to 30m long queue outside the GrandWest casino Market Hall on Tuesday ten minutes before the scheduled start at seven in the evening. It only started at eight after every shareholder had registered their attendance and found a seat in the large hall.

At 23:00 when we left, final voting results were still not available as scrutineers Computershare were overwhelmed with the number of ballot papers. All resolutions were however passed with over 99% majority with 99% of issued shares represented.

"It was the easiest, shortest and least attended AGM," says GPI chairperson Hassen Adams. The meeting was a lively affair with shareholders taking a genuine interest in their company. But it was minus the usual controversy that accompanies GPI meetings.

This came after a landmark agreement between major shareholder Cape Empowerment Trust (CET) and GPI to cease all hostilities "taking into account the best interests of broad-based black economic empowerment in the Western Cape".

CET had previously threatened to block the listing and contested the validity of the GPI BBBEE Trust and the issuing of 12.6m shares to the trust (see Finweek, September 20 2007). There were three different court cases running simultaneously and CET had threatened a court interdict to prevent the Trust from voting the shares.

'Regret not buying more shares'

Adams opened the meeting by giving highlights about the company's performance so far. But there had to be an explanation about the agreement and what it means for the company.

"Hostilities and litigation between us and CET are over. Minds have met in the interests of BEE. Let's hope it will never happen again," said Adams to loud applause. "It's been a long time outstanding that (CET chairperson) Shaun Rai and I shook hands again. This allows us now to go list your company in the JSE."

After this Adams gave the floor to Shaun Rai to address the gathered shareholders. Rai confirmed his company has "no outstanding concerns about this company" and that it now supports management in its bid to list and create wealth for shareholders.

Although details of the agreement are confidential, Finweek understands that CET will nominate a director (possibly Rai) to the GPI board soon after listing in mid December.

"I'm in the last days of my life on earth now, but my regret is that ten years ago I only bought 1 000 Grand Parade shares," said an elderly shareholder, known only as Mr Johnson.

"I will walk away a very happy man if every family in Cape Town and the Western Cape can get a share in this business."

'Basic stuff'

Johnson and 15 000 others bought their shares for 70c each in 1997, raising R28m to start the company which then went on to acquire minority stakes in the gaming and leisure market in the Western Cape.

Johnson, seated behind a 90-year old Mr Janerie and speaking with difficulty, was addressing the chairperson and fellow shareholders during question time.

Resembling a community meeting, sentiments like Johnson's were echoed by many more shareholders praising management for creating wealth for them and enquiring of the possibility of buying more shares.

But the jovial mood was not without the kind of shareholder activism GPI shareholders are renowned for. Many demanded an explanation as to why their shares would be sub-divided, asking about the implications of that to the value of their shares.

Management had to explain such "basic stuff" to the "unsophisticated" shareholders who have hung on to the shares despite what may seem like generous offers over the years.

#More on GPI in the next issue of Finweek.