Question NW2007 to the Minister of Finance

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07 September 2017 - NW2007

Profile picture: Topham , Mr B

Topham , Mr B to ask the Minister of Finance

With reference to his reply to question 589 on 26 May 2017, what is the name of each person who accumulated unduly large numbers of SA Reserve Bank shares before the South African Reserve Bank Act, Act 90 of 1989, was amended in 2010?

Reply:

In terms of the SARB Act (read with the regulations made in terms thereof), the most effective powers of the shareholders are the approval of the appointment of auditors for the bank and their remuneration, as well as the election of seven non-executive directors to the board. Shareholders have no powers in terms of the SARB Act to terminate the office of any director. Of the board of directors’ 15 members, eight directors (including the Governor and the three Deputy Governors), the majority of the 15 board members, are appointed by the President, also after consultation with the Minister of Finance. Shareholders elect seven non-executive directors from an approved list of candidates who may not necessarily be persons nominated by shareholders. The pool of candidates from which shareholders elect the directors is vetted by a Panel which is chaired by the Governor and includes a retired Judge.

The SARB Amendment Act, which introduced substantial amendments to the legal structure and operations of the SARB, amongst other things, adequately addressed the previous anomaly. Major amendments constituted the introduction of the concept of "associates" in respect of shareholders or potential shareholders of the SARB and the establishment of a panel (established and convened by the Governor) to give effect to fit and proper principles with regard to non-executive directors elected by shareholders. It resulted in the existing numbers of SARB shares held by all persons who qualify as associates of a specific shareholder or potential shareholder being taken into account in the determination of the number of shares (limited to 10,000 shares) that the specific shareholder may lawfully hold or acquire. Shareholders were also hereafter only entitled to elect non-executive directors to the Board that had been declared eligible by the panel. The Board consists of fifteen directors (eleven non-executive and four executive directors) of which the President appoints eight, which includes the 4 Governors and 3 Deputy Governors. The shareholders elect the remaining seven.

Consequently, shareholders of the SARB have limited powers, which in addition to the above (at a general meeting of shareholders), are limited to discussing the annual report and financial statements of the SARB, appointing of the auditors and approving their remuneration and discussing special business duly placed on the agenda of the meeting.

The above is a correct reflection of the position. What may be added is that since the introduction of the SARB Amendment Act, 2010, any person, together with his, her or its associates who held more than 10,000 shares could exercise a maximum of no more than 50 votes. The SARB Amendment Act also provided for a process whereby shareholders who were, together with their associates holding more than the maximum of 10,000 shares, to regularise their shareholding. The Legal Services Department of the SARB embarked upon a process whereby the affected shareholders were informed of the legal changes and requirements and shareholders were encouraged and assisted to regularise their shareholdings.

Despite these efforts, the 15 shareholders mentioned hereunder were evidently not willing to regularise their shareholding in the SARB and the SARB was obliged to approach the High Court (as envisaged in terms of the SARB Amendment Act) for appropriate relief.

Name

Surname

RBS Reference

No. of Shares

Shimon

Barit

016760

10,000

Sibylla

Smude-Lang

016720

10,000

Werner Markus

Duerr

016689

10,000

Elfriede Luise

Duerr

016686

10,000

Ernst Albert

Duerr

016685

10,000

Peter

Duerr

016684

10,000

Carolin Charlotte

Duerr

016681

10,000

Frederic Michael

Duerr

016680

10,000

Sophia Mary

Duerr

016679

10,000

Josephine Johanna

Duerr

016675

10,000

H Meyer Family Trust

 

016614

10,000

Gwendoline Mildred

Meyer

016606

10,000

Zacharia Petronella

Munnik

016504

10,000

Herman Werner

Lang

016505

10,000

Sally Helen Hanscomb

Joubert

016456

9,200

     

149,200

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