Diamond Trust Bank will have an extraordinary general meeting (EGM) on December 21. The company has not amended its articles of association since 1982 and want to update them to reflect new capital structures, governance, CDS and the electronic age, among others.
Jubilee Insurance will have an EGM on December 18
The various proposed amendments will have outcomes including:
- New capital: Creation of preference shares and also clears the way for a share split.
- Shareholders who don’t approve of company actions can have their shares forfeited. E.g. minority Serena shareholders who did not approve the conversion to TPSEA
- Modern technology: Allows notices and other documents to be e-mailed to shareholders. (This can save costs; i.e. the company has 10,000 shareholders and budgeted Kshs. 7 million for printing and postage of the ongoing rights document). . Also allows board meetings to be held by teleconference or video conference, allows dividends to be paid by electronic means (e.g. bank transfer, direct debit) not just by cheque and notices can be sent to shareholders outside Kenya
- Super shareholders? New articles recognize that 10 members constitute a meeting and allow any director or any 2 members to convene an EGM. The company’s top 10 shareholders own 48% of the company while the next 50 own another 10%.
- Governance: recognizes that directors are not disallowed from doing business with the company provided they disclose this to fellow directors and also don’t vote on such issues. Also, fellow directors may remove a director who misses 3 meetings.
- Cap on underwriting commissions at 10%. (Another cost-saving measure since the on-going rights issue has budgeted placing commissions estimated at 28%). Also, stockbrokers may be paid in the form of shares.
- Makes provisions that stem from the 2006 budget speech where the Finance Minister proposed that any dividends unclaimed after 7 years be returned to the CMA’s investor compensation fund from where individuals can claim when they resurface.
- A bankrupt person may vote by proxy
Charterhouse depositors cry foul
Charterhouse Bank and depositors are asking (in a full-page newspaper notice last week) why was their bank, with no liquidity problems, shut down without sufficient explanation and why they are still denied access to their funds almost six months later even after a court had lifted the order? The accounts of the bank remain intact and they are still earning interest on almost Kshs. 3.1 billion in deposits there as the statutory manager has invested surplus funds in government securities. Only staff costs have shot up reflecting the additional managers deployed from the central bank.