THE BOTTOM LINE
What will it take to relax the iron grip on Naspers shares?
Every unlisted 'A' share has 1,000 times the voting rights that listed 'N' shares enjoy
Reports that MSCI, one of the world’s leading index providers, is targeting companies with voting rights that favour select shareholders, should worry almost every South African. MSCI is reported to be considering reducing the weighting of companies that have unequal voting shares.
The company that most obviously springs to mind is Naspers, which is controlled through a structure that was put in place when the company was listed in the 1990s.Far from being relaxed over the years that structure was considerably tightened after Jannie Mouton launched an audacious and almost-successful bid for control in 2005. Every unlisted “A” share, which are held by a select group of parties, has 1,000 times the voting rights that listed “N” shares enjoy.
This means Naspers’s control position is unassailable.
And it’s probably just the sort of place that a powerful Chinese company would be reasonably happy to rest a holding of 34%. The long relationship with chairman Koos Bekker must also help.
The fuss about Naspers’s control structure is understandable. It goes against most governance principles and was particularly irksome when used by the board at last year’s AGM to make it appear opposition to its controversial remuneration policy was not as steep as it actually was.
But any substantial interference with that control structure, or Bekker’s extremely important role in it, could disrupt Naspers’ extremely valuable relationship with Tencent. As one analyst said, the sale of 2% of Tencent may have demonstrated some shareholder freedom and generated more billions to pour into IT ventures, but it might also have stirred a hornet’s nest.