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SIMON BROWN: I’m chatting with Steven Beattie from Steven Beattie Tuition. Steven, appreciate the early morning. The Transaction Capital AGM on Thursday – you attended. You sent me a message shortly after attending saying it was 22 minutes of very little. What was your experience at this? I assume you attended virtually.
STEVEN BEATTIE: Good morning, Simon. Yes, I did attend virtually and, as you correctly said, by my calculation the total AGM lasted 22 minutes. I’ve attended many AGMs and this by far is the shortest AGM. The matter that was actually handled during the meeting was a readout of the resolutions and the voting thereof.
None of my questions, which I typed on the platform, were read out at the meeting, which for me is unusual.
SIMON BROWN: Did they take any questions? In 22 minutes there’s not a lot beyond voting that they’ve really got time for.
STEVEN BEATTIE: Not a single question, Simon. I will say at the outset, of course, companies are entitled to respond after the AGM, but certainly in my experience it’s unusual, and answering after the fact, after the meeting, for me is not the best way in the interests of good communication and transparency.
SIMON BROWN: I take your point on that, because a big part of it is the ability to follow up on questions and more. So they said to you, ‘We’ve got your questions, we will get back to you at a later date’? There hasn’t been a lot of time since then; have they got back to you yet?
STEVEN BEATTIE: At the meeting, Simon, the chairman did ask if there were any questions related to the resolutions being proposed. The answer given was no, which is very strange indeed because my questions related around the auditor’s appointment as well as the appointment of the directors and the directors’ remuneration. Their reason was that my questions didn’t relate to the AGM, and they would come back to me via email – the Investors Relations Department.
After the meeting, I did send a couple of emails to the Investors Relations Department.
SIMON BROWN: In terms of the Companies Act and the like, an AGM is a legal requirement for a company, whether listed or not. But I don’t know if the act gives much in terms of actual shareholder rights except the ability to attend and vote.
STEVEN BEATTIE: Good question, Simon. Let me put it this way. There’s no specific statement in the Companies Act that makes provision for shareholders asking questions. However, there are two sections that deal with this; and I can read those sections. Section 61(8) states that a meeting must provide for any matters raised by shareholders with or without prior advance notice to the company. So this for me obviously implies the right to ask questions as part of these matters.
You did ask about virtual meetings and there is actually a section in the Companies Act dealing with that. Section 63(2), deals with virtual meetings and ensures that all participants can communicate concurrently. So certainly the Companies Act makes provision for that. And also the King Code and the JSE listing requirements emphasise constructive engagement between companies and shareholders, and [specify] good communication to ensure that there’s trust and transparency.
SIMON BROWN: That’s the key point of an AGM – that this is when the shareholders, who are the owners of the business, get to engage the board, who are the people who are running the business on behalf of those shareholders. We need to be clear about that, and it should be [clear]. I’ve been to some great AGMs which go on for an hour or two with back-and-forth between the board and shareholders. That’s really what we are looking for as investors.
STEVEN BEATTIE: Oh, good point. Absolutely. I totally agree. One of the reasons I attend AGMs, besides being able to vote on important matters, I like to learn more about the company and get a feel for management. And at this AGM I just feel I didn’t get that. I don’t feel it was particularly useful to me, to be honest with you.
SIMON BROWN: And truthfully everyone could have just voted by proxy. You mentioned that you were attending virtually. Pre-pandemic I don’t know if there’d ever been a virtual AGM. I’ve got to say there are drawbacks to virtual AGMs, but broadly I like the concept. It certainly means I can attend it. If you’re a Capitec shareholder and the AGM is in Cape Town, you can now log on. It is a good advancement. It can be abused, but I like it.
STEVEN BEATTIE: Agreed. Personally I think the hybrid is the ideal solution, Simon. So I like the opportunity for shareholders to attend in person as well as the opportunity to attend virtually. As you said, since Covid many companies today are still just doing virtual meetings. The Companies Act, as I mentioned, does make provision for virtual meetings, and there are certain requirements that need to be held there.
The reason given when I sent my emails [as to] why the questions were not being read out, is they said either the answers to my questions were already publicly available or my questions didn’t relate to the agenda of the AGM. Now I differ with this, and I informed them via email, Simon, because the Companies Act is very clear: I can raise any matter at an AGM. And furthermore, even if the answers to my questions are publicly available, they still need to address my questions.
SIMON BROWN: I agree on that 100%. Just because it’s in the public domain doesn’t mean you can’t raise it. And certainly I agree with your other thought out there, which is that you can raise any question. That’s what an AGM is about. Yes, I think you’re right; a virtual and in person hybrid is probably the better way to go.
Steven Beattie from Steven Beattie Tuition, I really appreciate your early morning insights on the Transaction Capital AGM last Thursday; 22 minutes and no questions. Not much of an AGM.
