Acsa tightlipped about minority shareholder allegations

Cape Town - Issues raised by minority shareholders at the 2016 annual general meeting of Airports Company of South Africa (Acsa) are all material to the litigation instituted by these shareholders, Acsa told Fin24 on Tuesday.

Acsa said it has commissioned five independent valuations of its share price.

“It is our view that the independent valuations are fair and reasonable,” said Acsa in response to questions posed by Fin24.

Acsa added that its board of directors and executives dealt with the various matters regarding the minority shareholders’ issues “in terms of all necessary legislative prescripts” as well as principles of good corporate governance.

“It would, therefore, be prejudicial to Acsa to provide a response to questions that form an integral part of the litigation instituted against it by the minority shareholders. The approach that is fairest to all stakeholders is to respect the current court process that has been instituted by the minority shareholders,” said Acsa.

This comes after City Press reported on Sunday that two of Acsa’s empowerment partners are instituting legal action, claiming the company is holding them “economically hostage”.

The two partners – African Harvest Strategic Investment (AHSI) and Up-Front Investments 65, with 1.8% of the total of 4.21% minority shares – claim they bought the shares under an understanding from Acsa regarding a future listing and consequent growth in value of the share price.

The two companies also claim Acsa is unable to pay them market-related dividends, as it incurred vast amounts of debt to build the King Shaka airport outside Durban without doing feasibility studies. The airport suffered a R1bn loss in the 2015/16 financial year. 

Despite these losses, Acsa appears to have paid merit bonuses to staff and personnel amounting to R165m, an increase of 47% compared with 2014/2015. 

READ: Acsa posts R1.9bn profit

Pieter Smit, the attorney representing AHSI and Up-Front, said all court documents have been filed and a date in the South Gauteng High Court in Johannesburg will be finalised before the end of the year.

His clients allege that Acsa’s spending on nonprofitable airports, for which it had to borrow money in the “national interest”, is not in the best interests of its shareholders.

According to the two partners, any possible dividends that might accrue to them would be wiped out by Acsa’s business decisions.