Skonsie said:
There should be a quorum before any AGM could start, was there a quorum, as I understand, there wasn't.... Was the AGM legal in terms of the Law ?
Telkom's Articles of Association state that "A quorum for a general meeting shall be the minimum number required by the [Companies] Act [which is 'three members entitled to vote'], provided that such number shall include the presence of the Class A Shareholder and Class B Shareholder duly represented at the meeting".
It seems that the situation is not only that the meeting was (according to my understanding of the law + info from Adv. Alachouzos) inquorate, but also that the company may in fact not have ANY MEMBERS AT ALL!!!
This is because a "member" (as defined in the Companies Act) means a person "who agrees to become a member of a company and whose name is
entered in its register of members" (section 103) -- and Telkom may not
have a register of members!
Below, without further comment from me, is the wording of an email which Alachouzos sent yesterday (sortly before the "AGM") to Telkom's comany secretary Mr Mashale (with a cc to me in my capacity as Secretary of SATAGGA).
Daniel Macqueen. [Alachouzos email follows]
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Dear Mr Mashale,
I am sending you this email in advance of my attendance today at the "13th Annual General Meeting of the members of Telkom". I have been appointed by the South African Telecommunications and General Governance Association ("SATAGGA") as its "proxy" for the purposes of this "Annual General Meeting" (hereinafter: "today's meeting"), and will be arriving at the Volkswagen Conference Centre in Midrand with -- amongst other materials -- a copy of the relevant relevant "Form of Proxy" executed by SATAGGA (and delivered to the Johannesburg offices of Computershare Investor Services 2004 (Proprietary) Limited) on Wednesday of this week.
I notice, incidentally, that the "Form of Proxy" included in the 16-September-2005 Telkom "Circular to Shareholders" -- i.e. in the circular distributed to Telkom shareholders in advance of and in connection with today's meeting -- bears on its face no statement of the sort contemplated by section 189 (2) (a) of the Companies Act 61 of 1973 ("the Act") and (further) that on the fourteenth page of the said circular there appears a note, quite inconsistent with the content of article 20.3.3 of Telkom's Articles of Association ("the Articles"), to the effect that "completed forms of proxy must be lodged ... or posted ... no less than 48 hours before the time appointed for the holding of the Annual General Meeting". I intend to draw attention to these matters at today's meeting.
Meanwhile, I have to tell you that the "other materials" referred to in the first paragraph of the present email include copies of letters from two attorneys (of different law firms) both of whom claim to have been told by you (last year) that Telkom has no register of members. Regrettably, my own researches (conducted since first seeing these letters) have led me independently to the conclusion that the company may INDEED have no such register and that even if it DOES have one there is in fact (and has since the end of March 2003 been) no "Class A Shareholder" or "Class B Shareholder" within the meaning of the Articles -- with the result (inter alia) that all purported exercises (post March 2003) of any of the powers of the "Class A Shareholder" and/or the "Class B Shareholder" have in fact been invalid. Since most of Telkom's present "board of directors" (including, I believe, the present "chairperson") consists of persons purportedly appointed in exercise of just such powers, I am greatly in doubt as to who (if anyone) is currently in legally-valid directorial control of the business and affairs of the company (and as to who, if anyone, is competent in terms of article 19.3 of the Articles to act as the chairperson of any Telkom general meeting now held). I intend to raise these issues at the commencement of today's meeting.
Finally, I am now copying to you (beneath the dotted line which appears immediately after my "signature" below) the text of the email which I sent to you on 14 October of last year in connection with Telkom's "12th Annual General Meeting", and I would ask you to note that (except for the fact that there is on this occasion no issue as to the TIMELINESS of any notice) the objections detailed in paragraphs 2 and 3 of that text are in fact applicable (mutatis mutandis) to the notice of today's meeting -- a fact to which I also intend to draw attention at the Volkswagen Conference Centre today.
Regards,
SMD (Michael) Alachouzos (Adv.)
[email protected]
Date (mm/dd/yy) = 10/21/05
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Dear Mr Mashale,
I am sending you this email in advance of my attendance today at the meeting advertised by Telkom as its "12th Annual General Meeting". I have been asked by attorneys for the South African Minority Shareholders' Rights Association to raise at the said meeting -- and I accordingly intend to raise thereat -- the following objections concerning the notice of the said meeting and (in particular) concerning that part thereof which has to do with the proposal to "consider and, if deemed fit, to pass, with or without modification" a special resolution authorising Telkom to acquire ordinary shares in its own issued share capital:
1. The said notice was not given early enough to satisfy the requirement of section 199 of the Companies Act 61 of 1973 (as amended) that the intention to propose a resolution as a special resolution be specified with "twenty one clear days' notice" of the meeting at which the resolution in question is to be so proposed. In order for that requirement to be satisfied in the present case, the relevant notice would have had to be given on or before the 22 September 2004. In fact, it has been ascertained through extensive telephonic enquiries conducted over the last three days that the circulars containing the notice were printed (by Ince (Pty) Ltd and not by the printer ("Graphicor") whose name appears thereon) overnight between 21 and 22 September and during the day of 22 September, that they were then sent (by multiple Ince delivery vans) to the Pretoria Post Office where they arrived throughout 22 September WITHOUT HAVING BEEN INSERTED IN ENVELOPES, and that it took the mail-room staff at the Pretoria Post Office between three and four days thereafter to insert the circulars into envelopes separately delivered by Telkom (or by Computershare on Telkom's behalf) and post them to the intended addressees.
2. Even if the relevant notice had been given in proper time, its wording is such that it would not have satisfied the legal requirements for a valid notice of intention to propose a resolution as a special resolution. Instead of setting forth the proposed text of a special resolution and indicating unambiguously that that is the text to be proposed for approval in general meeting, the notice eventually (and tardily) given sets forth a text and declares that that text is ("if deemed fit") to be passed "WITH OR WITHOUT MODIFICATION". No indication whatsoever is given what modification(s) may be being contemplated, or how extensive and/or far-reaching in effect such modification(s) (if approved) would be, and in the result what the notice actually amounts to is something to the effect that "We propose to pass either THIS or SOMETHING ELSE"! Such a notice is insufficient to make it clear to persons entitled to attend and vote at the relevant meeting what precisely it is that they are being asked to consider, and is not at all appropriate for the purposes of the aforementioned section 199.
3. The notice also fails to give fair disclosure or explanation of the reasons why the general meeting's passing of the "special resolution" referred to therein is being sought and/or of the possible effect of such resolution having regard to (inter alia) the potential for such resolution's abuse in the circumstances of the litigation currently taking place under case number 7502/04 in the High Court (TPD). That litigation, as you know, concerns the alleged invalidity of (inter alia) an earlier own-shares-acquisition-authorisation "special resolution" purportedly passed on 27 January of this year -- in reliance or purported reliance upon which purportedly-passed earlier "special resolution" very large transactions in Telkom shares have already been conducted by or through Telkom's private subsidiaries Rossal No 65 (Proprietary) Limited and Acajou Investments (Proprietary) Limited. Some of these transactions were, it seems, timed to coincide with the disposal of shares amounting to approximately 15% of Telkom's issued share capital by a Delaware LLC ("Thintana Communications") reputedly controlled by a US telecommunications company ("SBC") of which (or of a subsidiary of which) Telkom's director Shawn McKenzie is an American executive. These circumstances, properly considered, have implications -- such as ought to have been (but have not been) explicitly disclosed -- which have an important bearing upon the question to what use(s) any new (and VALID) Telkom own-shares-acquisition-authorization resolution is likely to be (or may possibly be) put.
