Reserve Bank targets eight families
Fin24

Reserve Bank targets eight families

2010-06-07 07:39

Cape Town - The Reserve Bank and National Treasury believe the state is being held hostage by eight powerful and “greedy” family shareholder blocs in the country’s central bank.

Amendments to the Reserve Bank Act principally target these power blocs which together hold 261 000 shares, Reserve Bank legal adviser Johann de Jager said on Friday.

Last week, the amendments to the act – which curtail the voting rights of shareholders to prevent the risk of power blocs and make shareholding possible for ordinary South Africans – caused a loud outcry from some of the bank’s more than 600 private shareholders.

On Friday Reserve Bank governor Gill Marcus, in her response to recent public hearings, told the standing committee on finance that it was not necessary to review the proposed amendments. She wants parliament to pass them urgently.

Allegations of an absence of corporate governance were raised by some shareholders during the hearings.

Disinterested parties such as the Institute for Democracy in South Africa (Idasa) were not entirely in favour of the amendments, believing parliament’s supervisory role over the bank should be broadened.

Among other things, the amendment is designed to strengthen the current limitation of 10 000 shares per person and prevent shareholders from being able to circumvent the voting restrictions through family, friends and spouses. According to Marcus, these circumventions enable shareholders and their associates to influence up to 25% of the voting process.

South Africa is one of the few countries that have private shareholders in the central bank.

Outspoken shareholder, German Michael Duerr, and members of his family allegedly own 100 000 of the total shares in the bank together.

After Friday's hearing Duerr said he did not know why he was being targeted, as he won’t have the right to vote after the amendments came into force because he no longer resides permanently in South Africa. He alleges that he left the country after being threatened by former Reserve Bank governor Tito Mboweni.

Marcus stressed that the Reserve Bank is a public entity and shareholding cannot have a profit motive.

Government receives 90% of the bank's profits. Marcus railed against some shareholders' insistence on a single extraordinary meeting to discuss a proposal of a 10% capital issue of the bank's net profits to the end of March.

Marcus said that everywhere central banks' prospects for profits are currently strong because fines are being imposed when bailout packages are handed to struggling commercial banks. These fines bring additional revenue into the central bank.

The Reserve Bank’s shares currently trade over the counter at about R12.50 per share, but the shares have a nominal value of R1 and the dividend amounts to 10c per share.

Sake24.com

For business news in Afrikaans, go to www.sake24.com.

*This article was updated in June 2019 to reflect that at the time of writing, Duerr and his family members owned approximately 100 000 shares in the bank. Previously, it additionally reflected this share ownership as a percentage of the bank’s shares.  As at 2019, the SARB has several hundred shareholders.

 
* This article was updated in June 2019 to reflect that at the time of writing, Duerr and his family members owned approximately 100 000 shares in the bank. Previously, it additionally reflected this share ownership as a percentage of the bank’s shares.  As at 2019, the SARB has several hundred shareholders.

Comments
  • Truth - 2010-06-07 08:01

    And if they name these families...we will see who the true owners of this country are!!!

  • gcr - 2010-06-07 08:45

    SARB better ensure that the rules and policies that they put in place don't come back and haunt them when they are no longer the favoured party and can't use cadre deployment

  • BART - 2010-06-07 08:48

    Please these eight families are preventing the looting of Reserves just like Zim, are the corrupt officals in governemnt behind this for their own pocktes or are they really looking after the well being of the people! Gill needs a big reality check!

  • TT - 2010-06-07 13:09

    Why does Mr Michael Duerr not buy shares/controlling stake in his own home-central bank? Did he believe he could just ride 'roughshot' on this developing nation, by controlling the country's Monetary Policy, without anybody noticing? We togh luck to him, because he has met his match in Gorvernor Marcus. Hope he doe not get his way blackmailing her as he used to like to do with previous Governor Mboweni!

  • Its our bank - 2010-06-07 13:15

    The whole shareholder structure seems odd for a country's central bank. Perhaps the review should go further than just changing some voting rules? Why not offer every individual South African taxpayer one share @ R1?

  • Milan - 2010-06-07 13:25

    2 Million shares = 100 % 100 000 shares = 5 % Okay? De Jager and Marcus try to define what is right and wrong! There is no law or regulation that interdict people to have the same interests! I've shares from the SARB, mostly I agree with M. Duerr and M. Pretorius, BUT I'm not Duerr or Pretorius! No the Bank do not get 90% of the profit - they get 100% of the profit minus 200,000 Rand! You should ask de Jager and Mracus about the inventory list of the gold reserves! About London and Zurich! Or ask the Lady regarding the conversation with Ciex and the SASS regarding the Lifeboat for one or the other Bank! Why likes Marcus to get the shareholders out before the AGM? May they ask to many nasty questions? Why risked she(?) a international dispute because of breaking a bilateral treaty between RSA and Germany? Why? Why are (real) independent experts are against that law? Ask your self?

  • TT - 2010-06-07 13:51

    Maybe Mr Michael Duerr needs to buy shares/controlling stake in his own home-central bank? He seems to believe that he can just ride 'roughshot' on this developing nation, by controlling the country's Monetary Policy, without anybody noticing? Tough luck to him, because he has met his match in Gorvernor Marcus. Hope he does not get his way blackmailing her as he used to like to do with previous Governor Mboweni.

  • Ian - 2010-06-08 09:24

    Government showing no respect from private property rights - whether those make sense or not - is a slippery slope to economic ruin. I fear for this country with it's kleptocratic government...

  • james - 2010-06-08 10:45

    Our RB does need shareholders not beholden to the current govt ie ANC. Once absolute control resides with govt/parliament, abuses such as we have seen in Zim are bound to happen. All politicians are driven by greed ie money. If you think they have a common interest in lookig after you or me you are sadly mistaken. Checks and balances our only hope and solution.

  • South-Africano - 2010-06-08 11:57

    Capitalism is the transfer of wealth from the hands of the many to the few - and some will become part of that 'few' - no matter how unlikely. With that being said, you dont honestly believe Mr German has our interest @ heart compared to ANC, hence, the ANC might as well exercise that capitalism rather than my German counterpart. Eish! some white ppl they so distrust us so much that they will sell our souls...

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