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DURBAN - EOH Holdings plunged more than 10percent during intra-day trade on the JSE yesterday morning following the company’s annual general meeting resolution on packages for its non-executive directors last week, according to an industry analyst.

The share price dropped to R39.45 in the morning, well below Friday’s closing price of R44.22 a share. It closed 9.68percent lower at R39.94.

The AGM passed key resolutions to approve the remuneration policy and to approve the implementation report by 55.8percent and 55.1percent respectively.

The group managed to get a significant approval from its shareholders with 99percent votes in for remuneration payable to its non-executive directors. The group invited shareholders who voted against the non-binding endorsement of remuneration policy and the implementation of the remuneration policy to engage with it in writing.

EOH is the largest technology services company in Africa and has a wide range of solutions in industry consulting, IT services, software, industrial technologies and business process outsourcing.

“The combination of the macroeconomic environment and the adverse, unfounded media coverage that EOH received temporarily affected the group’s position in the market. Despite these market conditions all areas of the business coped very well,” the group said in the statement. 

In the half-year results in March, the group unveiled its new business strategy aimed at simplifying its business model that would enhance effectiveness, improving commercial agility and driving optimal business performance well into the future.

It said it would establish dual growth platforms by forming two independent businesses, each with its own distinct identity and brand, growth strategy, go-to-market approach, business model and culture.

EOH said the first business would trade under the EOH brand and focus on ICT services and solutions while the second, Newco, would be characterised by a high degree of specialisation in each business area.

Peter Takaendesa, a portfolio manager at Mergence Investment Managers, said the EOH shares were not affected by the negative publicity. “I think the share price pressure is likely a delayed reaction to the AGM held on Friday. Although all the resolutions presented at the AGM passed, the percentage of shareholders who voted against a number of resolutions was higher than normal,” Takaendesa said.

He added that there were also online media allegations related to potential Eskom contracts that were still under consideration.

“The company has not yet responded to those media allegations and unfortunately the ongoing news flow is adding to uncertainty. The company needs to take bold steps to address the root cause of these issues and work on rebuilding stakeholder confidence,” he said.