SA reserve bank bill to be amended

SOME private shareholders of the South African Reserve Bank (Sarb) told parliament yesterday their challenge to a bill designed to limit their influence was not financial gain or power to influence policy, but a desire for proper transparent and good corporate governance.

Presenting a submission to parliament’s finance committee, which is holding public hearings into the South African Reserve Bank Amendment Bill, SARB shareholder Mario Pretorius cautioned the bill increased the powers of a secretive organisation that was a ‘law unto itself’.’If sunlight is the best disinfectant, this [bill] does not promote sunlight,’ said Pretorius. ‘It promotes darkness.’While SARB governor Gill Marcus has accused ‘a very small minority of shareholders’ of ‘being driven by self-interested profit motive’, Pretorius told MPs to be aware of how the bill takes power away from the SARB board and concentrates it in the hands of a governor and deputies.’They [the bank’s executive] are not accountable to anyone. This bill is against the recommendations of King Reports I, II and III which are clear about moving away from ‘excessive concentration of power of management’,’ said Pretorius.Pretorius admitted some of the bank’s decisions and strategies can’t be made public. But, as an example of areas where secrecy should not be allowed, Pretorius referred remuneration policy.’I can look at the annual report and see that the governor, who sits on the remuneration committee, has awarded himself a 52 per cent salary increase. This is more than the total dividend paid to 643 shareholders. You can’t be the third highest-paid central bank governor in the world and not explain to shareholders and the public what you do to earn that.’ He stressed that none of his questions put to the bank as a shareholder have ever been answered. ‘I purchased my shares because I wanted to participate in annual general meetings and learn how this august organisation is run. ‘I have been sorely disappointed. I have a right to participate and to ask; influencing monetary policy is not my job. My participations should be on corporate governance issues tabled at AGMs [annual general meetings].’German national Michael Duerr – who holds 100 000 shares in SARB with his family – said he had retired in 1998 and lived quite comfortably.He had no desire to be a ‘greedy guts’ and make vast sums of money from the central bank shares he bought as a ‘hedge against the government’s nuclear programme’.Duerr questioned the urgency of passing this legislation and suggested there were already enough restrictions on shareholders. He responded to questions about his desire to influence monetary policy by saying he would like to think he could discuss these issues with the people who made the decisions. He then went on to say he believed South Africa’s policy of inflation targeting was ‘utter nonsense’.He urged parliament to play a more significant role when it came to holding the SARB executive to account because, he argued, the central bank was self-governing and comparable to a ‘Trojan horse’.Meanwhile, the Institute for Democracy in South Africa cautioned that in the government’s haste to pass a bill limiting shareholder influence, provisions in the bill allowing eight of the 15 board of directors to be appointed by the executive made the central bank vulnerable to political influence.- Fin24.com