Category Archives: CSR

East African Breweries AGM

The 2006 EABL AGM was held at Safari Park Hotel on November 2 at 11:00 a.m. Registration was a breeze – with almost as many proxies as shareholders and it was a very quick AGM thereafter with the agenda– approval of accounts, dividend, directors’ election & remuneration and auditors – all done within a half-hour. The meeting was wiith a full board, led by Chairman Jeremiah Kierieni and MD Gerald Mahinda, and all directors present except for Evans Mwaniki (KQ chairman).

New finance director C. Caldwell was added to the board while Wanjiku Mugane was also re-elected. However, two directors, the Chairman and Richard Kemoli, who are both over 70 years, have to be endorsed each year to continue as directors.

I had thought of putting a shareholders vote over the matter in the interests of opening up the board to younger people and women but I felt that I would have been lynched. Needless to say, no shareholders objected on account of their age.

The Chairman had urged shareholders, many of whom who – in addition to proposing or second agenda items – also congratulated the board, made speeches or tried to ask questions, to refrain till after the agenda was done. One of the first was on the race with Safaricom and the Chairman assured shareholders that the company would strive to wrest back the top earnings crown from Safaricom. Early on it appeared that there would be very few questions, but here are some of them:

  • Increase dividend and bonus shares: is a recurring them at all AGM’s and EABL also had its share. There were many variations of the same question, some shareholders talking of previous board who had been more generous. Chairman explained that they can’t increase dividend for a few small shareholders as everyone get an increase. It was also troubling to see a graphic in the annual reports that showed shareholders receiving 20% of payments from the company earnings while 70% goes out as taxes to the government.
  • Minority interest: There’s a huge payment of profits for minority interest that doesn’t compute in the list of shareholders. MD explained that South African Breweries owned 20% of Kenya Breweries and Diageo owns 54% of UDV. KBL and UDV pay dividends to these two companies and whatever is left now goes to EABL shareholders.
  • CSR: are you meeting your commitment to devote 1% of profit to corporate social responsibility? MD said CSR last year was allocated about 45m and this year will get about 80m. However, like at the Standard Chartered meeting, CSR is not a popular topic at AGM’s. One shareholder, while commending EABL and Nation media group for helping with famine relief and other disasters, they should put shareholders first – and he went on to lament how the company has never acceded to repeated shareholder wishes for more dividends or bonus shares.
  • Are all shares fully issued re: ESOP? MD explained that shares for the ESOP are acquired from the market
  • Why have sports sponsorships declined? Chairman replied is that they still sponsor a lot of sports such as soccer and horse racing – but the funds are disbursed from HQ for better control and monitoring.
  • Missing or discontinued beer brands; MD replied that they discontinue slow-moving brands like pilsner ice and senator special to put more effort into others like white cap light and citizen. He also said they would announce such decisions to the public in future.

Hot Button: Barclays Bank It started with a misunderstood question from one shareholder who wanted dividends to paid as cash in rural areas for those who don’t have bank accounts. Chairman answered that the company had a program with Barclays bank where dividend cheques were banked without commission. One manager was there from Barclays who unsuccessfully tried to explain the issue. More questions were shouted out leading the Chairman to ask that they talk to the Barclays man after the meeting had ended. I went through this problem a few years ago – many shareholders want to cash their dividend cheques immediately – and while this is free for Barclays account holders, there’s a fee of a few hundred shillings if you don’t have a Barclays account. (also banks make some easy money when new investors choose to cash their IPO refund checks immediately – for a fee of course)

Goodies cap (pilsner), t-shirt (sengenge), lunch box (chicken, sandwich, juice, yoghurt, water, cake, apple, orange, egg)

Standard Chartered AGM

The Bank held it’s 2006 AGM at KICC today.

The line for proxies was longer, and served slower, than that of shareholders causing me to miss half the meeting. In fact, I was turned away when my name was not on the proxy list. As I walked away I remembered something and went to another attendant who found my name on his list – it appears different officers had different lists of proxies!

New chairman
Today marked the retirement of Hannington Awori as Chairman and long serving director of the Bank. He was replaced by Mr. David Njoroge the, well regarded, former auditor general of Kenya. (Wrongly listed at government site as still current)

Shareholder questions
They were not many questions as two shareholders who feature at most AGM’s, and recently at the Nation’s, took up quite a bit of time with endless comments and praise for the Chairman and performance the Bank.

– Why no women directors?
– Can we have bonus share to mark Chairman’s retirement?
– Why doesn’t bank tailor personal loans for retirees, not just employed people?
– Why no provision for a 250 million shilling judgement the Bank lost in the courts?

Hot button issue
The Bank’s CEO had earlier concluded his long speech on the Bank’s year with a video featuring blind runner Henry Wanyoike, a world paralympics champion – which has now being converted into an advertisement (with a Kenyan theme) that the Bank is showing in 54 countries as a model of partnership.

There had also been mention of the corporate social responsibility activites of the bank through support of projects totalling 40 million shillings to various community partnerships during the year such as a new 6.5 million shilling bus for the Thika School for the Blind.

Some shareholders were upset about this and, during question time, wanted to know why the bank was spending their money on programs instead of more dividends. Another asked for the bank board to present a budget for such activities before embarking on them without consulting shareholders first. As others lined up for lunch they questioned if 40m was actually spent on projects (Kenyans mistrust and believe there is corruption beneath even good ventures).

Handed out after the meeting was a tote bag with t-shirt and lunch box from inter-continental hotel (sprite can, burger, samosas, apple, drumstick, spring roll). And in a few weeks, a 3.1 shilling per share dividend.