Private owners an anomaly at Bank — Marcus

The role of private shareholders with personal agendas in the appointment of half the Reserve Bank’s board of directors had created an “unhealthy” and fraught situation, the Bank’s governor, Gill Marcus, said on Tuesday.

It also affected the calibre of directors, who should act in the best interests of the organisation, she told Parliament’s finance committee and select committee on appropriations.

Shareholders elect seven of the 14 directors. Marcus said it was “extremely unhealthy” to have shareholders who were not committed to the bank’s public purpose.

Shareholder demands for a bigger fixed dividend had been a source of tension between them and the board for many years. Marcus clarified that the “negative environment” created by this private shareholding structure did not affect monetary policy as the board only dealt with governance issues, not policy.

“Greedy” shareholders tried to push up the share price by circulating the false idea that R10bn-R12bn in reserves would be available for distribution if the Bank was liquidated. Shares had been offered for R4600. The official price is R12,50.

Source:  www.businessday.co.za, 20100224

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