Charlotte Mathews
5 December 2008
Johannesburg — SHAREHOLDERS in coal and mining services company Sentula took the unusual step of voting down the standard proposal to approve the remuneration of non-executive directors at the company's annual meeting yesterday.
Chairman Sam Jonah said after the meeting that the money had already been paid to directors for the past financial year and could not be recovered. The vote indicated shareholders' displeasure that a number of nonexecutive directors, who were on the board last year but "for all sorts of reasons" had now left, had been paid for their services.
Sentula's shares were suspended from trade at the request of the directors at 860c in mid-September, just before negative sentiment sweeping financial markets wiped 50% or more off share prices across the board. The request was made because of irregular transactions uncovered in the company's accounts under previous management, which required a restatement of the annual results and an extensive forensic investigation.
In October, Sentula said it had made a R242m provision for money that had been misappropriated.
Jonah told the meeting Sentula was now a different company from the family-managed business he joined in 2006. Corporate governance was strengthened, new management was appointed, a new auditing firm -- KPMG -- was put in place and new board sub-committees were constituted.
But asked after the meeting about the desirability of re-listing, given the potential for a sharp drop in Sentula's share price even if it were to adjust to equity markets generally, Jonah said the directors wanted trading to resume.
He believed the nature of the business, with its exposure to a broad spread of commodities and mix of businesses, put it in a better position than other mining companies serving a single commodity and country.
Sentula was working to address the JSE's questions on the reasons for qualifying its accounts but Jonah could not say when the shares would be re-listed. The company was also working with the JSE and the Financial Services Board to bring the investigation into irregular trading in the shares earlier this year "to a swift conclusion".
He told shareholders that Sentula had notified the regulatory authorities about the possibility of legal actions, including laying charges against certain individuals. It had been granted a sequestration order to gain access to a large amount of money, had recovered an asset and suspended two employees who would face disciplinary procedures.
Management was doing everything possible to recover the assets and had made good progress, he said.
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