Investor tears into Barclays Africa

Barclays Africa came under fire from a disgruntled investor during the company’s annual general meeting on Tuesday.

Johannesburg - Barclays Africa Group yesterday came under fire from a disgruntled investor for poor attendance of meetings by two non-executive directors and the excessive pay for its chairman, Wendy Lucas-Bull, during the company’s annual general meeting.

The investor also questioned the unit of London-based Barclays on its plans to beef up economic black empowerment after its spin-off from its parent company.

Barclays has majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania, Uganda and Zambia.

Mehluli Mncube, an analyst with Sentinel Retirement Fund, which owns a 4 percent stake in Barclays Africa, said that once the company was unbundled, the empowerment shareholding would have to increase to more than 10 percent from about 2 percent.

Empowerment

“We feel that the empowerment shareholding is not high enough,” Mncube said. “We also want to know what is going to happen to synergies once the bank has been unbundled. Barclays Africa has women directors and empowerment directors, but we hope for more.”

In 2004, Barclays Africa was the first of South Africa’s big four banks to allocate 10 percent ownership to black partners through the Batho Bonke empowerment consortium.

The deal was unwound partly in 2009 and fully in 2012, after the consortium sold their equity.

Mncube said he was also not happy about the poor attendance of Peter Matlare, the former chief executive of Tiger Brands, and Yolanda Cuba, who attended only 66 percent of the scheduled meetings and received just less than R1 million for the 2015 financial year.

A total of 12.165 percent of shareholders voted against the re-election of Cuba.

Mncube also argued that the remuneration of Lucas-Bull was excessive.

But independent non-executive director Trevor Munday said Lucas-Bull’s remuneration, which came to R4 960 800 in the 2015 financial year, was well deserved.

“We benchmark the chairman’s fees against banks and large corporations. We believe the fee is well deserved,” Munday said, referring to travels to African markets and contribution to the business.

He said Lucas-Bull’s remuneration was in sync with her peers from JSE-listed companies. A total of 18.3 percent of shareholders voted against the remuneration policy.

Lucas-Bull said black empowerment was one of the options tabled in the offloading of the stake. “We’re not clear how far Plc will sell down. They have indicated they would prefer to still have a significant shareholding, but we’re proceeding based on the worst case that Plc goes to zero.”

Barclays in March announced plans to scale back in Africa and reduce its 62.3 percent stake in Barclays Africa over the next two to three years. It said earlier this month that it had sold 12.2 percent of Barclays Africa’s shares to money managers, leaving it with a holding of 50.1 percent.

“The 12.2 percent was significantly oversubscribed. We had over 100 bidders, which indicates that the interest is big,” Lucas-Bull said.

Barclays, which was previously the trailblazer in the global financial sector, said it would focus on two divisions, Barclays UK and Barclays Corporate and International.

Interest for the stake had been high with former Barclays chief executive Bob Diamond and his business partners indicating that they planned to access the stake.

* With additional reporting by Bloomberg

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