Excerpts from the 2008 Scangroup AGM, Q & A session held today at KICC.
top issues were dividend cheques and bonus shares
Misplaced shareholder cheques: The question was posed by Mr. Shah, who’s probably the second most famous public shareholder after Mr. A W Chami and who had waited for nine months for a dividend cheque error to be corrected, and was faced with bank charges of several hundred shillings for his efforts.
In response company said they were working to sort out shareholder cheque and unclaimed dividends issues
- Said the figure was now down to 3.2 million shillings. (which if unclaimed after a few years, will go to CMA)
- Passed some blame on to stockbrokers who have not reconciled some accounts since the IPO
- On cheques, they have an arrangement with their bankers (CFC), so customer could cash their cheques for free can (at the CFC upper hill branch)
- Said electronic (EFT) payments had not been successful because a lot of information provided by shareholders was wrong.
Bonus shares; several shareholders argued for bonus shares. Chairman replied times that – it was not the right time, they will cross that bridge when they get there, when they need to they will adjust their capital, will look at fund raising at that time (shares were not the only avenue available)
CSR company is weak; Chairman replied they are doing more this year including some work with IDP’s.
Marketing company that does not market! can the company do some advertising so it becomes well known?; CEO replied that they pitch to corporates and there’s not a marketing person in East Africa who is not aware of the company or its affiliates.
ESOP; It was good to have discussions at this AGM on the company’s employee share ownership plans (ESOP) – as CEO Bharat Thakar explained that the board had approved for 6 million shares a per year to be availed through the ESOP to key revenue drivers and to ensure that senior managers were very well incentivized. All managers get targets, which entitles them to some options at the end of the year. The Chairman added that that the shares were not free, were paid for by managers to the company and were priced on the date of acceptance i.e. market price. The report 2007 report noted that was ESOP set up under a trust deed in February 2008 but that no options have been granted so far, though shareholders have approved 15 million shares.
African ambition different shareholders challenged the board their ambition to be the biggest media buyer in Africa by 2010 when they (i) didn’t have the capital (ii) had dormant offices in Malawi, Mozambique, Zambia and Nigeria. The first shareholder was actually asking the company to give bonus shares/increase float (from the current 160 million shares, to at least 250m) while the CEO answered to the second - that all the offices were active, (except Nigeria) and were used for billing companies in those countries.
Cross listing one shareholder asked them to cross list as their market was also Uganda and Tanzania. Chairman said it would make sense at the right time, but it was also very expensive to do.
Super sleuth one eagle eyed shareholder pointed out, and the company confirmed the error; that the top ten shareholders (printed in the annual report) had 66, not 50% of the company shares
Goodies lunch offered, at KICC grounds, but no details.