Edward Kieswetter resigns from Shoprite board
By Ann Crotty - May 10th, 13:59
Africa’s largest grocer Shoprite said that its lead independent director Edward Kieswetter had resigned as a result of his appointment as the commissioner of the SA Revenue Services (Sars).
The resignation, which required an exemption from the takeover regulation panel leaves Shoprite without a lead independent director at a time when shareholders are considering a controversial proposal relating to the possible purchase of Shoprite deferred shares owned by chairman Christo Wiese.
Kieswetter, whose appointment to the top job at Sars was announced six weeks ago, joined the revenue service on May 1.
The regulations controlling takeovers prohibit directors from resigning from a board from the date an offer is made until it is declared unconditional, lapses or is withdrawn.
On April 18 Shoprite announced it was considering repurchasing Wiese’s 265-million Shoprite deferred shares in exchange for 20-million Shoprite ordinary shares valued at about R3.5bn. The deferred shares control 32.3% of Shoprite’s total votes. The transaction could take months to be finalized.
One analyst said the need to get approval from the takeover regulation panel appears to have been behind the delay in the formal announcement of Kieswetter’s departure. In terms of the listings requirements, companies are obliged to notify the JSE of any change to the board of directors “without delay and no later than by the end of the business day following the decision or receipt of notice detailing the change”.
The change must then be announced to the market “as soon as practically possible”. Shoprite did not provide any explanation for the delay in notifying shareholders but did refer to the need to get an exemption from the takeover regulation panel. The panel’s deputy executive director, Basil Mashabane, told Business Day he could not talk about an ongoing transaction, but said the panel “is empowered to provide dispensation”.
In its SENS statement, Shoprite confirmed the panel had granted the exemption. It also noted the exemption had been granted on condition “that in the event the company decides to replace Mr. Kieswetter or fill the role that he played within the company, in relation to the affected transaction, the company must endeavour to appoint, or fill such role with a director that is independent and capable of fulfilling the role played by Mr Kieswetter in the company during the offer period.”
Kieswetter was not only lead independent director but also chairperson of the remuneration committee and member of the nominations committee.
Shoprite did not indicate that it would be looking to appoint a new lead independent director in the near term. The JSE requires a lead independent director on the board when the chairman is not considered independent, as is the case with Wiese. However, the takeover regulations also prohibit the appointment of a director to the board of an offeree company during an offer period.
The Companies Act requires at least three independent directors to form an “independent board” to consider proposed transactions. Following Kieswetter’s resignation, the Shoprite board has five independent directors.Business Live
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