Capital contribution was referred to as a loan for ease of understanding
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By Jayesh Jaga
AT THIS STAGE the Trustees are not aware of any legal action against the Trust. Should this arise, it will be dealt with through the appropriate legal channels.
The cash payout was not subsequently converted to a loan. It was a cash payout paid to all employee beneficiaries. It was funded by a capital contribution to the Trust by Oceana. The capital contribution was referred to as a loan for ease of understanding, as the Trust had to pay it back. This is standard in trusts of this nature.
The 2013/14 amendment did not result in a dilution of shares. Employee beneficiaries were fully informed about the amendment to the Trust deed.
From 2013 to 2014, there was a material amendment to the Trust deed to provide for the extension of the lock-in period vesting date, the payment of a cash payout and a beneficial change to the number of dividends employee beneficiaries receive for the shares.
The Trustees embarked on an extensive countrywide roadshow in November 2013, reaching more than 2 000 beneficiaries. The Trustees explained the amendment and the consequences of a “yes” or a “no” vote.
The Trustees also sent all the beneficiaries a booklet and a detailed explanatory letter advising them of the general meeting to vote on the amendments and its impact.
An independent external auditing firm managed all voting processes. Around 2 000 of the beneficiaries voted “yes” to the proposed amendment (nearly 100 percent of those voting). It is important to realise that the employee beneficiaries have never owned the shares.
The Trust owned the shares up until the vesting date, which was in January 2021.
After this, employee beneficiaries could either choose to have the shares transferred to them or sell their shares and receive the cash proceeds (after settlement of the capital contribution balance, costs and tax).
The Trust deed governs the powers and authority of the Trustees in relation to the conduct of all matters of the Trust including access to any Trust documents to beneficiaries.
The Trustees have acted in accordance with the Trust Deed in providing Ms Johnson with access to the document.
The Trustees adhere to the highest levels of governance. In terms of the Trust deed, beneficiaries’ best interest is foremost for Trustees, and Trustees have abided by this obligation.
We are proud of the significant financial benefits that the Trust has yielded – with dividends and early payout of around R477 million so far.
As such, we consider any allegations and or claims that the Trustees have not acted in the interest of beneficiaries to be without any merit and malicious in intent.
Jayesh Jaga, chairperson Oceana Empowerment Trust