JSE may step into Accentuate vote disputeComment on this story
The JSE may investigate a dispute between Accéntuate management and shareholders who were prevented from voting against non-executive pay at the flooring company’s annual meeting.
The group of three investors, who together hold about 25 percent of Accéntuate’s stock, had taken legal action against the company after attempts to oppose resolutions were thwarted when their votes were declared invalid, said Adolf Potgieter, one of the shareholders and the former head of Coronation Capital.
Accéntuate chief executive Fred Platt said the votes were deemed “faulty” by independent lawyers.
“The JSE is aware of the court proceedings,” the bourse’s issuer regulation division responded to questions.
“The [exchange] will consider investigating this matter once the court proceedings are finalised,” it added.
The shareholders have filed an application in the South Gauteng High Court.
Potgieter’s shareholder group wanted to vote against remuneration for non-executive directors, which needs 75 percent of investor support to be approved. That includes the salary of Ralph Patmore, the head independent director, who oversees the remuneration committee.
They also attempted to block the right of managers to issue shares for cash or to make acquisitions. These “special” resolutions have been put on hold pending the court case.
Potgieter and former managers at Coronation Capital, Cron von Siedel and Mike Patchitt, have been trying to get a seat on Accéntuate’s board to gain more influence over management, who they accuse of over-spending company funds on executive salaries and expenses.
They also object to the sale of Centurion Glass & Aluminium for R10 million in 2011 after the unit was bought for about R75m four years earlier.
Platt and chief financial officer Chris Povall denied any financial mismanagement.
“Its absolute rubbish,” Povall said. “This thing has been investigated internally, externally, and there’s absolutely zero substance.”
Accéntuate shares have declined 32 percent this year, valuing the company at R72m.
The stock closed at 60c in Johannesburg on Friday – 3.45 percent up but less than half of the 12-month peak of R1.33 it reached in November.
Net income fell 52 percent to R3.2m in the six months to December, while operating expenses increased 13 percent to R74.5m.
“The economics are tough,” Povall said. “Our margins are under pressure and our operating costs, largely driven by petrochemical issues, are increasing and we’re not able to pass on a lot of those back into the marketplace.”
The shareholders, led by Potgieter, voted against special resolutions at the previous three annual general meetings, Platt said. Their votes had been referred for independent legal opinion at the request of other investors who did not support the group, he said.
Momentum Asset Management, which owns a 4 percent stake in Accéntuate according to data compiled by Bloomberg, declined to comment on the dispute.
Accéntuate executive director Donald Platt received a bonus of R654 000 in the year to to June last year, about a third of his basic pay of R1.98m, according to the company’s annual report.
Fred Platt got a R200 000 bonus on top of a basic salary of R2.17m.
The Platts and Povall were awarded share options worth a combined R1.6m on June 10, the company said in a statement the following day.
Accéntuate listed on the JSE in 2006 under the name of Safic Holdings. It rebranded two years later. – Bloomberg