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Simon Brown: I'm chatting with Steven Beattie of Steven Beattie Tuition. Stephen, thank you for your early morning. Transaction Capital AGM on Thursday – you attended. Immediately after participating, I received a message saying that it was only 22 minutes. What was your experience with this? I think I participated virtually.
Stephen Beatty: Good morning, Simon. Yes, I attended virtually. And as you rightly said, by my calculations, the shareholder meeting lasted a total of 22 minutes. I have attended many shareholder meetings, but this is the shortest. What actually transpired at the meeting was the reading and voting of resolutions.
None of the questions I typed on stage were read aloud at the meeting, which is unusual for me.
Simon Brown: did they take Any Question? 22 minutes doesn't leave much time for anything other than voting.
Stephen Beatty: No questions asked, Simon. Let me start by saying that, of course, companies have the right to respond after a shareholder meeting, but in my experience that is certainly unusual, and responding after the fact, after the meeting, to me is a sign of good communication. Not the best way to do that. And transparency.
Simon Brown: I understand that, because a big part of that is being able to follow up on questions and things like that. So they said, “We have some questions and will get back to you later''? Not much time had passed since then. Have they gotten back to you yet?
Stephen Beatty: At the meeting, Chairman Simon asked if there were any questions regarding the proposed resolution. The answer given was no. This is really strange because my questions related to the appointment of auditors, the appointment of directors, and remuneration of directors. Their reasoning was that my question was not related to the shareholder meeting and that the question would be returned to me by email, i.e. in the Investor Relations department.
After the meeting, I sent several emails to the Investor Relations department.
Simon Brown: From the perspective of the Companies Act, it is a legal obligation for companies, whether listed or unlisted, to hold a general meeting of shareholders. But I'm not sure this law gives much in terms of actual shareholder rights other than the ability to attend and vote.
Stephen Beatty: Good question, Simon. Let's put it this way. There are no specific provisions in the Companies Act for shareholders to ask questions. However, there are two sections that deal with this. And you can read those sections. Article 61(8) provides that matters raised by shareholders must be decided at a general meeting of shareholders, whether or not prior notice is given to the company. So this clearly means to me the right to ask questions as part of these issues.
You asked about virtual meetings, and there is actually a provision in the Companies Act that deals with that. Section 63(2) deals with virtual meetings and ensures that all participants can communicate at the same time. Indeed, the Companies Act has provisions for this purpose. The King Code and JSE listing requirements also emphasize constructive engagement between companies and shareholders. [specify] Good communication to ensure trust and transparency.
Simon Brown: That is the important point of the general meeting of shareholders. This means that shareholders, the owners of the business, have an opportunity to interact with the board of directors that runs the business on their behalf.we need and should be clear about that [clear]. I've attended some great shareholder meetings where there was an hour or two of back and forth between the board and shareholders. That's what we really want as investors.
Stephen Beatty: Ah, that's a good point. absolutely. I have exactly the same opinion. One of the reasons I attend shareholder meetings is that in addition to being able to vote on important matters, I also want to learn more about the company and get a feel for the management team. And at this general meeting of shareholders, I felt that this was not understood. To be honest, I don't think it was particularly helpful for me.
Simon Brown: And the truth is, anyone could have voted by proxy. You mentioned that you're participating virtually. I don't know if there were virtual shareholder meetings before the pandemic. I have to say that virtual shareholder meetings have their drawbacks, but I generally like the concept. That means you can certainly participate. If you are a shareholder of Capitec and the general meeting will be held in Cape Town, you can log on now. That's good progress. It can be exploited, but I like it.
Stephen Beatty: Agreed. Personally, I think a hybrid is the ideal solution, Simon. So we like the opportunity for shareholders to attend virtually as well as in person. As you said, since Covid, many companies are still just doing virtual meetings today. As mentioned earlier, the Companies Act has provisions regarding virtual meetings and there are certain requirements that must be held there.
The reason you gave when sending the email [as to] Why was my question not read out, was the answer to my question already published, or was I told that my question was not related to the agenda of the general meeting? Now, I objected to this, Simon, and the Companies Act is very clear, so I told them in an email. This means that any issue can be raised at the general meeting of shareholders. Furthermore, even if the answer to my question is publicly available, you still need to answer my question.
Simon Brown: I agree with that 100%. Just because it's in the public domain doesn't mean you shouldn't put it up. And indeed, I agree with your other thought. That means you can raise any question you want. That is the purpose of the shareholders' meeting. Yes, I think you're right. Perhaps a hybrid of virtual and in-person is a better approach.
Steven Beattie from Steven Beattie Tuition, I really appreciate your early morning insight into last Thursday's Transaction Capital AGM. 22 minutes, no questions asked. It's not really a general meeting of shareholders.
