JSE
INVS INL
INPR/INLP -Investec/Investec Bank - Impact of tax changes on Investec Limited
Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE share code: INPR
ISIN: ZAE123000063814
Investec Bank Limited
Incorporated in the Republic of South Africa
Registration number 1969/004763/06
JSE share code: INLP
ISIN: ZAE123000048393
REPUBLIC OF SOUTH AFRICA: BUDGET SPEECH 2007 - IMPACT OF TAX CHANGES ON INVESTEC
LIMITED AND INVESTEC BANK LIMITED NON-REDEEMBALE, NON-CUMULATIVE, NON-
PARTICIPATING ("PERPETUAL") PREFERENCE SHARES DIVIDENDS.
In his budget speech on 21 February 2007, the Honourable Minister of Finance in
South Africa proposed the introduction in 2008 of a 10% withholding tax on
dividends and the elimination of STC (Secondary Tax on Companies) in two stages:
a reduction in the STC rate from 12.5% to 10% effective 1 October 2007 and the
abolition of STC during 2008. The text of draft legislation giving effect to
these proposed changes has not yet been released.
Enquiries have been received from preference shareholders as to whether Investec
will increase preference dividends on its South African perpetual preference
shares in view of the anticipated negative impact on such preference
shareholders of the new dividend tax while Investec Limited and Investec Bank
Limited, as issuers, are expected to benefit from the proposed abolition of STC.
This matter is still under investigation but preliminary legal advice indicates
that any steps taken to increase preference share dividend rates to compensate
perpetual preference shareholders for this new tax, would require an amendment
to the Articles of Association of Investec Limited and Investec Bank Limited,
and is thus a matter to be considered by ordinary shareholders.
It is believed that an increase in the dividend rate on Investec Limited and
Investec Bank Limited`s perpetual preference shares to compensate for the new
dividend tax would be consistent with the intention of the existing income tax
adjustment clause in the respective Articles of Association. It is accordingly
planned, in principle, to submit a special resolution to respective ordinary
shareholders once sufficient clarity exists on the text of the legislation to
enact the proposed tax changes.
A further announcement in this regard will be made once the detailed legislation
is published.
Johannesburg
26 February 2007
Investment Bank and Sponsor:
Investec Bank Limited
Date: 26/02/2007 17:21:57 Produced by the JSE SENS Department.
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