SOUTH AFRICA – Africa’s largest grocer Shoprite has announced the resignation of Edward Kieswetter from the firm’s board and the position of lead independent director.
Kieswetter also served as the chairperson of the remuneration committee and member of the nominations committee.
His resignation follows his appointment as the commissioner of the SA Revenue Services (Sars) effective May 1, 2019.
Kieswetter’s resignation comes at a time when shareholders are considering a controversial proposal relating to the possible purchase of Shoprite deferred shares owned by Chairman Christo Wiese.
According to a Business Day report, regulations controlling takeovers prohibit directors from resigning from a board from the date an offer is made until it is declared unconditional, lapses or is withdrawn.
In April this year, Shoprite announced it was considering repurchasing Wiese’s 265-million Shoprite deferred shares in exchange for 20-million Shoprite ordinary shares valued at about US$242.91 million (R3.5bn).
Currently, the deferred shares control 32.3% of Shoprite’s total votes and the move seeks to dilute Christo’s voting rights and align the company with international best corporate governance practice.
It was previously reported that Kieswetter may have to remain on the board until a proposal to repurchase deferred shares owned by chairperson Christo Wiese was finalised, a report by New24 reveals.
However, Shoprite noted that the Takeover Regulation Panel granted an exemption to Kieswetter as outlined in the Companies Act.
The Johannesburg Stock Exchange (JSE) listed firm did not however, indicate that it would be looking to appoint a new lead independent director in the near term.
Under similar circumstances, the bourse requires a lead independent director on the board when the chairman is not considered independent.
However, the takeover regulations also prohibit the appointment of a director to the board of an offeree company during an offer period.
The Companies Act requires at least three independent directors to form an “independent board” to consider proposed transactions.
The board thanked Kieswetter for his contribution as a director and, in particular, “for the leading role that he has played over the last few months in relation to the proposed transaction”.
Following Kieswetter’s resignation, the Shoprite board has five independent directors.