Ethel Hazelhurst
TOMORROW is a big day for the Reserve Bank. It will hold its ordinary general meeting in the morning, an event brought forward from its normal slot in September, to mark the bank’s 90th anniversary.
At the end of the day, the bank will celebrate its birthday at a cocktail party, hosted by governor Gill Marcus. Deputy President Kgalema Motlanthe will deliver a keynote address.
The bank’s general meeting last year was postponed to December to allow time for the Reserve Bank Act to be amended. The amendments prevent shareholders from using the voting power of others.
In recent years the general meetings have been high-profile affairs as dissident shareholders, demanding better returns on their investment, attempted to hijack the proceedings. Under the act, shareholders receive a fixed amount of 10c a share, rather than a share in the profits. They are also allowed to hold only 10 000 of the 2 million shares in issue.
Attempts to force change have been spearheaded by Michael Duerr, a German national who said he could influence the votes of between 10 and 15 percent of the shareholders. He failed to attend the December meeting but said he would attend tomorrow’s meeting. After last year’s meeting he said: “The illegality of some points of the agenda made me stay away and not endorse the rightfulness of the meeting.”
The Reserve Bank is one of a few central banks worldwide that has private shareholders. Their powers are strictly limited and they have no influence over monetary policy or the running of the bank.
But this has not prevented calls for the nationalisation of the Reserve Bank, an issue that has moved onto the political agenda. In January last year, trade union federation Cosatu said it fully supported the proposal to nationalise the central bank “contained in a report to the ANC national executive committee”. The report contained a reference to the issue by ANC secretary-general Gwede Mantashe.
These calls coincided with attempts by Cosatu to persuade the bank to cut its repo rate further. At a meeting in the preceding November, the bank’s monetary policy committee kept the repo rate at 7 percent. The bank subsequently cut further, to a 30-year low of 5.5 percent, by the end of last year.