Media coverage
10 April 2012
CoAL responds to my recent criticism about aspects of its corporate governance
Source: www.businessday.co.za
Author: David Gleason
COAL of Africa (CoAL) is angry that I commented unfavourably last week about aspects of its corporate governance.
I continue to take issue with the company over its claim that its 567-page registration document, released on November 3 to the Australian Stock Exchange, is available to shareholders on its website. It is — but not where investors would look. They will go to the section headed Investors and Media, which is where company announcements are typically lodged. When they go into these and find the announcement for November 3 last year they will be invited into an abridged version of 20-odd pages — but there is no hyperlink to the full document.
A visit to Sens produces the same result. This applies also to the London Stock Exchange’s RNS news service. I do not think it unreasonable to expect that a company seeking to raise about $100m (about R750m) would go to some pains to ensure easy access of the information shareholders and potential investors may require.
The company has ensured since my comments appeared in Torque last Wednesday (April 4) that the full version appears in the screen of the home page when first opened. Previously, a visitor was required to rake around to find it. At least that observation has been acted upon.
Wayne Koonin, CoAL’s finance director, takes issue with me about the tax consequences. They are, he says, "totally unrelated to this filing". Why does he say this when point 3 on page 24 of the full document opens the can of worms? After saying a lot about tax residency in South Africa and the potential effect on significant shareholders of the withholding tax on dividends and interest payments, and of capital gains tax, the announcement says: "The Group Restructuring is being carried out, in part, to overcome these tax inefficiencies."
Finally, I have asked for clarity on section 617B of the Australian Corporations Act. Is it the responsibility of "significant" shareholders to notify the market if their stakes increase or decline by more than 1%, or does it fall on the company? And, if it’s the shareholder’s responsibility, how is this notification achieved? CoAL says it can’t get clarity until after Easter because the Australians have all gone off to picnic next to their favourite billabong.
I do my best not to make mistakes in these columns — but I do make them nevertheless. When I do, I apologise and I do so now in respect of the registration document which was indeed on CoAL’s website (though hard to find).
Meanwhile, and though CoAL says it’s unaware of any investigation, I have sight of an e-mail from London’s AIM exchange to the effect that it is looking at this matter.