Olympics Trip for Bidvest Board Draws Shareholder Concern
(Bloomberg) — South African conglomerate Bidvest Group Ltd. is being forced to explain itself after asking shareholders to approve financing of a trip to the Paris Olympics for its chairman and two non-executive directors.
Institutional Shareholder Services Inc., the world’s largest proxy advisory firm, has recommended to shareholders that Chairman Bonang Mohale, Chief Director Renosi Mokate and non-executive director Sindi Mabaso-Koyana vote against refunding for the trip. The vote will take place at the Johannesburg-based company’s annual general meeting on December 1.
Responding to questions on November 25, Bidvest said: “Bidvest met with shareholders in a pre-general meeting last week and this special resolution was one of the issues discussed.” “Constructive follow-up discussions subsequently took place with some shareholders.”
ISS said in a report to clients that the demand for the company, which generates about 127 billion rand ($7.4 billion) in annual revenue from activities such as operating ports and providing cleaning services, threatened to compromise directors’ independence.
Bidvest justified its request for the 1 million rand refund to be approved by saying the company was a sponsor of the South African Sports Federation and the Olympic Committee.
“Given the relatively excessive amount, support for this decision is not recommended,” ISS said in a note to customers sent to Bloomberg upon request.
Bidvest’s minor shareholder, Calvert Investment Management Inc., said it would follow ISS’s recommendation and vote against the decision. Calvert is owned by Morgan Stanley.
The California Public Employees Retirement System, or CalPERS, said it would vote against it, as did the British Columbia Investment Management Corporation, the New York City Employees’ Retirement System and the Florida Retirement System State Board of Governors.
The Florida SBA said the payments “are excessive and may be considered to potentially compromise independence.”
Some money managers also questioned the independence of Bidvest’s board, saying there were too many executives on the board.
Glass Lewis & Co., a rival of ISS, did not recommend that customers take similar action. Norges Bank Investment Management said it would approve the decision, as did the California State Teachers’ Retirement System.
Bidvest’s largest shareholders include Public Investment Corp., which manages the pensions of South African government employees, Westwood Global Investments LLC and Standard Bank Group Ltd.
Mabaso-Koyana referred questions to Bidvest when contacted by Bloomberg. Mohale acknowledged a question but did not answer the questions; Mokate did not respond to calls or text messages on his mobile phone.
“The Paris Olympic Games were a proud and important event for South Africa and naturally for Bidvest, which is the main sponsor of TEAM SA,” the company said.
Bidvest invited all its non-executive directors and 80 junior employees to join the management team on a trip to Paris “in recognition of our contribution to excellence”.
Mohale, Mokate and Mabaso-Koyana were the ones who made themselves available.
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–With help from Loni Prinsloo and Anthony Osae-Brown.
(Updates with voting intentions of additional shareholders in paragraphs 8 to 11)
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