Liberty meetings fail to engage minorities
May 24, 2005
By Ann Crotty
Johannesburg - Two minority shareholders at the annual meetings of Liberty Life Group and Liberty Life Holdings yesterday described their efforts to engage the directors as `frustrating`, `disappointing` and `a waste of time`.
After the meeting, minority shareholder Theo Botha said there was nobody on either board who would protect the rights of minorities.
Both companies were being run in the interests of Standard Bank, the controlling shareholder. Derek Cooper, the chairman of Liberty Group and Liberty Holdings - and Standard Bank - said the boards had `no concern about the independence` of several of the directors who sat on the two boards.
Cooper said the issue of cross-directorships and independence `doesn`t concern us at all. Both [Martin] Shaw and [Buddy] Hawton are people of great integrity.`
He also refused to discuss at the meetings the reasons for the continued existence of Liberty Holdings, but gave an undertaking that the board would consider a number of recommendations relating to its future `and will report back to shareholders` on the outcome.
The two minority shareholders - Roy McAlpine and Botha - came to the meetings separately to raise their concerns about issues including the seeming absence of independent directors on both boards and the justification for the continued existence of Liberty Holdings, whose only asset was a 50.2 percent stake in Liberty Group.
Botha queried how Hawton and Shaw could be described as independent directors of Liberty Holdings and Liberty Group, given that they were also directors of Standard Bank.
Hawton and Shaw are members of Liberty Group`s remuneration committee, audit and actuarial committee, and its group risk management committee.
They are also members of a number of Standard Bank board committees. Botha said that in terms of the UK`s combined code on corporate governance and South Africa`s King 2 report, Shaw and Hawton could not be described as independent.
Cooper responded: `It`s the clear, clear view of the board that they are both totally independent as defined by the King 2 report. We`re not governed by the UK`s combined code.`
McAlpine questioned the continued existence of Liberty Holdings, which he described as a `huge value trap and an anachronism for which there was no room in the 21st century`.
He recommended Liberty Holdings be wound up or at the very least a number of independent directors be appointed to decide what should be done with its R460 million cash.
`In terms of my definition, an independent director of Liberty Holdings would not be a director of either Liberty Group or Standard Bank.`
The shares of Liberty Group rose 75c to R65 yesterday. Liberty Holdings rose R4.50 to R169. The life assurance sector gained 0.23 percent.
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