Trustco shareholders win vote to remove board but fail on legality

During a general meeting held by Trustco shareholders last week, the majority voted to remove the current Trustco board.

However, board chairman Raymond Heathcote, who is also facing removal, has ruled that the vote was invalid because the meeting was held without the required 21-day notice.

Documents seen by The Namibian, issued by independent scrutineer Leone Wolhuter, appointed by both parties, show that 43.75% of proxied shares supported removing the board, compared to 42.96% against.

Meanwhile, 10.66% of the shareholders decided not to vote.

“It is recorded that the chairperson ruled that the meeting had not been properly constituted due to concerns relating to notice requirements.

That ruling concerns legal interpretation of statutory notice provisions and does not relate to the integrity of the proxy verification process. I make no finding on the legal validity of the meeting itself, as that is outside of my mandate,” says Wolhuter.

Minutes from the meeting, seen by The Namibian, show that some members requested that the chairman be removed from chairing the meeting as he is directly conflicted.

However, Heathcote refused to recuse himself, asserting his proprietary right to vote and chair as per the company’s articles of association.

“Raymond Heathcote reaffirmed, referencing the articles of association, that he is the designated chairman for the meeting.

He stated that while shareholders have the right to raise concerns, he is not present to address personal allegations, especially in relation to any criminal conduct or not,” reads the report.

A subsequent show of hands saw the vast majority of attendees support Heathcote remaining in the chair.
VALIDITY OF VOTE

The meeting’s validity ultimately hinged on a technical interpretation of the Companies Act.

According to the meeting minutes, Heathcote ruled that the meeting was not properly constituted due to inadequate notice.

While Riskowitz Value Fund (RVF) argued that it followed a ‘clear days’ principle for the 21-day notice period, Heathcote determined that Section 1(8) of the act requires the exclusion of Saturdays, Sundays and public holidays.

Under this calculation, the meeting could only have legally taken place on 23 February.

RVF has proposed five new directors to take control: Grant Pattison, Dee Sauls-Deckenbrock, Jerome Davis, Sepo Haihambo and Robert Hutchinson-Keip.

The current board is made up of Heathcote, Quinton van Rooyen, Floors Abrahams, Winton Geyser and Janene van den Heever.

RVF general partner Sean Riskowitz says the shareholders will be going to court over this verdict.

“RVF, together with other shareholders, will pursue all appropriate legal and regulatory remedies to give effect to the resolutions supported by the majority and to ensure that shareholder rights are upheld in accordance with Namibian law and accepted governance standards,” says Riskowitz.

The relationship between the two entities, which seemed strong in 2024 when RVF signed a non-exclusive agreement to invest up to US$100 million (approximately N$1.6 billion) in hybrid capital, began to deteriorate after a failed share sale in Legal Shield Holdings.

That share has now been unwound.

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