Chairman quits as battle for Letshego goes to the wire
Mbongeni Mguni | Friday June 24, 2022 11:33
By Press time on Thursday, voting in the AGM was ongoing where the Botswana Public Officers Pension Fund is seeking three seats on the board, while asset management firm, Allan Gray had four nominees it wanted voted in.
Letshego is a homegrown microlender now present in 10 African countries and boasting assets in excess of P16 billion. BIHL Ltd, a founding shareholder and the key driver of strategy at Letshego, held 28.1% equity, while the pension fund held 30.9% as at last week Thursday. Allan Gray holds 1.2% equity in Letshego on behalf of unnamed shareholders.
Mmegi is reliably informed that ahead of the AGM, the BPOPF increased its holdings in Letshego to just below 35%, a revelation linked to the Botswana Stock Exchange’s announcement that shares worth about P143 million changed hands last Thursday, in the second largest turnover in a single day for the Exchange this year. The BSE did not reveal the investors behind the transaction, but public records show that about 86.5 million shares were traded on the day, in what a market analyst told Mmegi was a “power move” ahead of the AGM.
Banda and two other directors were due to retire at the AGM and had put themselves up for re-nomination to the board, reportedly with BIHL’s backing, in a move opposed by asset manager, Allan Gray.
Mmegi is informed that at the heart of the battle between shareholders is Letshego’s strategic direction, as the pension fund in particular feels there has been erosion of value for shareholders in recent years, including the more than P300 million value lost recently after the board axed its chief executive, Andrew Okai.
Allan Gray, meanwhile, is on record as saying its concerns revolve around high executive remuneration despite Letshego’s “significant deterioration in operational performance and shareholder value”. The asset manager is also unhappy with the microlenders’ expansion into East and West Africa which it described as “unsuccessful”.
“The operational performance of the group has suffered since the expansion began, with the more stable and profitable operations in Southern Africa effectively bankrolling those in other geographies,” Allan Gray managing director, Phatsimo Ncube told Mmegi last week in emailed responses to enquiries.
“The board has defended the expansion and indicated a willingness to continue it despite the apparent struggles.”
Meanwhile, results from the AGM are only expected either over the weekend or on Monday, after Letshego reportedly said ballots would have to be cast and then tallied over 48 hours before final results are revealed.
Mmegi is additionally informed that one of Allan Gray’s four nominees dropped out of the race at the eleventh hour, meaning the race is effectively between the three from BPOPF, three from the asset manager and two other names put forward by Malawian banking tycoon and First Capital Bank Botswana chair, Hitesh Anadkat.
Anadkat holds 2.9% equity in Letshego and was expected to provide the swing vote should the final tally be split between the two major equity holders being the pension fund and the BIHL.