Share

Kicked in the teeth

Is Anglo American – founded by Sir Ernest Oppenheimer in 1917 – trying to distance itself from its South African heritage and mines? It looks very much that way. Anglo American [JSE:AGL] is headquartered in London and its primary listing is on the London Stock Exchange, with secondary listings on the JSE and in other southern African countries. But SA remains a major source of profits for Anglo and home to many of its major assets. Anglo doesn’t seem to like that perception.

Maybe it’s because Anglo is a global company and doesn’t want the “developing market” tag. It’s a big company, one of the world’s largest mining groups, and used to getting its own way. But as it showed last week, it can be quite the bully when it thinks things may not go its way. That doesn’t reflect well on the massive group and it may cause some concern among its many South African shareholders.

The scene was Anglo’s annual AGM last Thursday, held at the Queen Elizabeth II Conference Centre in London. How British – but that’s the way Anglo wants it. The victim of Anglo’s corporate bully boys was SA’s well-known shareholder activist Theo Botha. After flying out to London – at his own expense – Botha was denied access to the AGM, which he has attended probably 10 times before. The reason? Still trying to be fully explained by Anglo but related to his documentation, his letter of proxy.

Anglo offers a complicated explanation revolving around the companies Botha was representing and whether he was eligible to vote based on the 100 shares nominated to him. That doesn’t wash. Anglo knew Botha was coming to its AGM (he’s no stranger to Anglo’s executives), knew the questions he wanted to ask and didn’t, in our admittedly cynical opinion, want to answer them.

“I was kicked in the teeth. I was entitled to attend the AGM and ask questions. There’s been no problem with my documentation before,” Botha says. He’s not upset about the wasted flight and the short shrift he received at the hands of Anglo. What Botha is upset about is not getting answers to his questions. “It’s the questions that are important.”

What are the questions Anglo clearly didn’t want to answer, at least not in a public forum like the AGM (though it should be noted Anglo didn’t go out if its way to provide link-up facilities for shareholders and the media in SA to engage in the AGM)? Pretty much the usual stuff Botha has been asking, without success, at previous AGMs, the last being the Anglo Platinum AGM. “CEO Cynthia Carroll’s appointment as chairman of Angloplats, remuneration issues and share buybacks,” says Botha.

Doing his homework for the AGM, Botha asked weeks in advance for a copy of the 2010 minutes. They were sent to him with an email from group company secretary Nicholas Jordan: “May I ask if you are intending to attend our AGM this year and whether you have any questions that we can answer in advance of the meeting.”

Botha responded – which seems to have set off alarm bells at Anglo. They knew he was coming, knew what he wanted to ask and apparently decided that by hook or by crook they’d keep him out.

The questions (which we detail in a separate report) clearly hit a raw nerve at Anglo. But that’s no excuse for their despicably bad corporate governance. Botha wasn’t only there as a proxy for Sasfin but for many other shareholders in SA and the media who couldn’t attend the Anglo AGM. The unanswered questions raise a host of new questions about Anglo’s behaviour.

What Anglo did say at its AGM

“FIRST, I want to welcome you all to our 2011 AGM – and especially to those shareholders who may have travelled some distance to be with us,” said Anglo American chairman Sir John Parker when opening the AGM. Seems his welcome didn’t extend to Theo Botha, who had travelled to London but wasn’t allowed in. Botha didn’t mind the forsaken trip, just the questions Anglo wouldn’t let him ask.

In similar vein, Anglo CEO Cynthia Carroll welcomed visitors – “especially those of you who have travelled so far”. Maybe South Africa isn’t “so far”. It seems United States-born Carroll’s welcome was reserved for visitors from the US and Alaska, of all places.

Sir John touched on a subject “very dear to us all” – the dividend. Readers will remember Anglo skipped a dividend payment, much to the horror of shareholders and investors. But Sir John says dividends have been restored.

The AGM also saw the retirement of former CEO Nicky Oppenheimer. He’d spent 43 years with Anglo. Maybe his departure is a sign of the times.

Some questions Anglo didn’t want to answer

It’s not hard to see why Anglo American was reluctant to have Theo Botha asking the following questions at its AGM in London. It goes to the heart of corporate governance and questionable incentives at the giant corporation. Here are some of the questions Botha wasn’t allowed to ask.

* “Could you please explain to me why this board nominated the CEO (Cynthia Carroll) to be chairman of Angloplats, which goes against the King III principles of good governance?”

It’s a good question that seems to see Carroll in a conflicted position. Botha goes on, referring to Anglo’s latest financial statements that needed to be approved at the AGM.

“By separating and clearly stating the roles and responsibilities of the chairman and CE we aim to avoid unhealthy concentration of authority. It seems to me this group has one set of rules for the holding company and a different set of rules for its subsidiary, Angloplats. How long will the CEO remain in this conflicted position?”

* Looking at its remuneration report, Botha asked: “For 2011 the committee is proposing to increase the maximum cash element from 75% to 87,5% of basic salary for executive directors. This will take up the short-term bonus to 175%.”

* On the same subject, Botha adds: “The committee is proposing the normal maximum award level be increased to 350%; all we seem to be doing is racking up the remuneration for the CEO and CFO. Is this not an extremely dangerous practice for all shareholders?”

* And then: “Why are you only focusing on the CEO and CFO remuneration packages at the expense of our line managers?”

Botha is particularly critical of the package afforded to chairman Sir John Parker, who he says is becoming the most expensive chairman in the business and who – in terms of the incentives – can buy shares at half price.

 Sir John is a professional chairman, chairing five FTSE 100 companies. We’ve questioned his apparently lucrative role before, when he was chairman of Mondi. We were quietly asked to lay off Sir John because he was “useful” and had “good contacts in the City”.

Good contacts? It’s hard to imagine Sir John hanging out with the shaven headed, 30-something investment bankers and stockbrokers we understand are the real “contacts” in the City. But who knows? Maybe Sir John gets around. But it’s still hard to see him at a down table restaurant in Soho.
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.5%
Rand - Pound
23.95
-0.3%
Rand - Euro
20.51
-0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.5%
Platinum
895.30
-0.2%
Palladium
991.47
-1.0%
Gold
2,196.11
+0.1%
Silver
24.46
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,818
+0.2%
All Share
74,028
+0.2%
Resource 10
56,225
+1.0%
Industrial 25
103,464
+0.2%
Financial 15
16,455
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders