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21 Sep 2009 15:23
Shareholders want to be heard at the South African Reserve Bank’s annual general meeting (AGM), one of the shareholders said on Monday.
“It is our meeting where we want to be heard and would like to transact what we are entitled to,” shareholder Mario Pretorius said in an open letter to Reserve Bank Governor Tito Mboweni.
This followed a stormy AGM last week, when some of the bank’s shareholders and Mboweni locked horns.
Mboweni became involved in Equality Court proceedings with Pretorius following last year’s AGM at which he told the shareholder not to speak to him like black people were spoken to in the past.
This year Mboweni again asked shareholders to be quiet.
Although the shareholders had raised six issues, they were not discussed as the Reserve Bank’s legal team determined that they fell outside of the AGM’s ambit.
“At the 89th meeting last Thursday you insisted on a vote before the annual financial statements could be discussed,” Pretorius wrote.
“You promised that there would be an opportunity to pose concerns and questions in the meeting, but you most conveniently did not recognise me and most conveniently closed the meeting for your lunch.”
He said he would use the open letter to pose questions to Mboweni “with the request that they be answered as proof of the King II corporate governance that the [Reserve Bank] claims to follow”.
Read the open letter to Tito Mboweni
Pretorius charged that there was no Reserve Bank accountability, transparency, inclusiveness or responsibility from the bank’s board when it came to shareholders.
“In the words of King II, we shareholders are worried about the excessive concentration of power in the hands of management,” he said.
Pretorius said he wanted to address a question to the chairperson of the Reserve Bank’s remuneration committee.
He said he wished to ascertain how the committee justified the 14% raise in remuneration of the governor, cost to company, to R4,3-million a year.
Pretorius said there was presently world-wide sensitivity to excessive remuneration of banking officials.
He said the Reserve Bank’s profit had dropped by 61% this year and the governor had received a 42% pay rise for the past two years.
“The governor is already the third highest paid central bank official in the world, earning three times more than, by comparison, Mr Ben Bernanke at the New York Federal Reserve in the US,” Pretorius said.
He said Mboweni earned 2,5 times more than his counterpart in the National Treasury, the minister of finance and more than the president.
Pretorius asked if the Reserve Bank board had quantified the effect of Zimbabwe’s official use of the rand and the subsequent fractional lending of its banking system, uncontrolled by the Reserve Bank, on the quantum of money supply growth of the rand.
Pretorius also asked if Mboweni and the board had discussed the possibility of the nationalisation of Reserve Bank, and wanted to know if the bank had been officially rated for black economic empowerment and if so, what rating it had achieved.
Pretorius further questioned how the bank would resist political pressure from the African National Congress.
It had publicly stated, through Congress of South African Trade Unions (Cosatu) general secretary Zwelinzima Vavi, that there were “pertinent differences” in the ANC’s macro-economic policy and that of the Reserve Bank, in particular the bank’s policy of inflation targeting and its use of the “blunt instrument of interest rates” to curtail inflation.
Mboweni’s office was not immediately available for comment.—Sapa
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