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Distribution of Circular and Notice of General Meeting
GRAND PARADE INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/003548/06)
Share code: GPL
ISIN: ZAE000119814
(“GPI” or “the Company”)
DISTRIBUTION OF CIRCULAR AND NOTICE OF GENERAL MEETING
INTRODUCTION
Shareholders are referred to GPI’s SENS announcements dated 23 August 2018 and
28 August 2018 in terms of which it was announced that the Company received a valid
demand to call a general meeting of shareholders in terms of section 61(3) of the Companies
Act No. 71 of 2008 (“Demand”) from parties purporting to be agents of beneficial shareholders
that hold 12.6% of the voting rights of the Company (“Representatives”).
Shareholders were furthermore advised that in terms of the Demand, the Representatives
proposed that all the non-executive directors of the Company be removed (“Concerned
Directors”) and that shareholders then re-elect four non-executive directors, from both the
Concerned Directors and from four new individuals that have been proposed as non-executive
directors of GPI (“Proposed Directors”).
Although the Representatives limited the total number of directors to be elected to four
directors, the Company does not believe that such limitation is competent, and accordingly
each of the Concerned Directors and the Proposed Directors whose election is approved by
ordinary resolution at the general meeting of shareholders, will be elected to the board of
directors of the Company (“Board”).
VIEWS OF THE EXECUTIVE MEMBERS OF THE BOARD
The executive members of the Board, who comprise all Board members other than the
Concerned Directors, are of the view that shareholders of the Company should vote against
the resolutions to remove the Concerned Directors and against the resolutions to appoint the
Proposed Directors.
The Company is a unique company with a distinctive background. It was initiated as a
community-based broad-based black economic empowerment company and was built up from
grass-roots level. Although the Company has since been listed on the JSE and is open to all
investors, it remains true to its roots as a community-based broad-based black economic
empowerment company. This means, inter alia, that smaller community-based shareholders
are as important as and have an equal voice to larger institutional shareholders, and that the
strategy and decisions of the Company are still informed by one of its founding principles,
namely to create long-term value and investment returns for its shareholders.
The Concerned Directors have all been elected to office time and again with overwhelming
shareholder support, some of them as recently as at the last annual general meeting of the
Company. Many of them come from the original community constituencies which formed the
original investor base of the Company and which are still investors in the Company, and they
are exponents of the ethos and principles of the Company.
The Concerned Directors are highly qualified and respected members of the community and
have served as directors of the Company loyally and, in the view of the executive members of
the Board, competently for many years, and in some instances since the inception of the
Company.
Due to their long-standing involvement with the Company, the Concerned Directors are
intricately familiar with the affairs of the Company and its subsidiaries. Each of them has a
unique skill, experience and perspective, and contributes to the Company in a unique and very
valuable way.
The Concerned Directors have been party to the development of and have overseen the
implementation of the current strategy of the Company, which has seen it diversifying into the
food and manufacturing sectors, so as to be less dependent on the gaming industry. The
strategy also encompasses controlling and operating assets as opposed to being minority
shareholders in assets. This is a long-term strategy, the implementation of which is well under
way, and the fruits of which will in due course be shared by patient long-term investors. Whilst
embarking on this transformation, the Company has continued to reward its shareholders with
consistent dividends.
In the event that the Concerned Directors are removed and all the Proposed Directors are
installed in their place, a small but vociferous group of shareholder representatives, some of
whom are not even shareholders themselves, and whose incentives are not necessarily
aligned with those of the broad base of long-term shareholders, will in effect have obtained
control of the Board and will be able to implement whatever their agenda may be. This may
include altering the strategy and making changes to the executive team.
The Board firmly believes in the current strategy of the Company and is concerned that the
implementation thereof should not be disrupted and that the Concerned Directors should
continue to be trusted with overseeing such implementation.
Some of the Company's businesses are regulated by national and provincial gaming
authorities. The Concerned Directors have all complied with the very stringent probity
requirements of the national and provincial gaming authorities. It is not yet clear whether or
not the Proposed Directors will be able to comply with these probity requirements. A failure to
do so could have adverse consequences for the Company.
Following receipt of the Demand, and having regard to potential uncertainty regarding the
practical implications which the existence of probity requirements may have on being elected
and/or serving as a director of the Company, the Company engaged with the JSE in order to
determine a suitable date by which the circular, referred to below, had to be dispatched to
shareholders. The circular is being dispatched in accordance with the final timeline set by the
JSE. It has come to the Company’s attention that the Representatives, or certain of them,
approached the Western Cape Gambling and Racing Board to gain access to certain
confidential information regarding the incumbent GPI directors. Such information was provided
by the Representatives to the JSE in connection with its deliberation of and setting of the
timeline. The Western Cape Gambling and Racing Board has subsequently confirmed in a
letter to the Company that in obtaining the relevant information the relevant Representatives
failed to follow the mandatory procedures prescribed by the applicable legislation for obtaining
access to such confidential information and, as a result, the information accessed by the
relevant Representatives and provided to the JSE was not properly obtained in accordance
with applicable legislation. The matter is being investigated by the Western Cape Gambling
and Racing Board. In this regard, the Company is seeking legal advice as to what steps
(criminal and/or civil) may be taken against the Representatives in connection with their
unlawful conduct.
The executive members of the Board who are shareholders intend to vote against all the
resolutions for the removal of the Concerned Directors to be voted on at the general meeting
of shareholders.
DISTRIBUTION OF CIRCULAR AND NOTICE OF GENERAL MEETING
Shareholders are hereby advised that a circular (“Circular”) relating to the requested general
meeting will be distributed to shareholders today, Wednesday, 26 September 2018. The
circular also incorporates a notice convening a general meeting of shareholders (“General
Meeting”) for the purpose of considering, and, if deemed fit, passing, with or without
modification, the resolutions contained in such notice.
Notice is hereby given that the General Meeting will be held on Wednesday, 31 October 2018
at 18h30 at GPI’s offices situated at 33 on Heerengracht, Foreshore, Cape Town, or such
other venue as may be announced on SENS and on the Company’s website
(www.grandparade.co.za). Any change to the venue of the General Meeting will be announced
on SENS and on the Company’s website by no later than Tuesday, 9 October 2018.
The Circular is available in English only. Copies may be obtained during normal business
hours from the registered office of the Company and from the offices of the Company’s
sponsor, PSG Capital, from Wednesday, 26 September 2018 until Wednesday, 31 October
2018 (both days inclusive). A copy of the Circular will also be available on the Company’s
website (www.grandparade.co.za).
IMPORTANT DATES AND TIMES
Shareholders are referred to the table below setting out important dates and times in relation
to the General Meeting.
2018
Record date in order to be eligible to receive the notice of Friday, 14 September
General Meeting
Notice of General Meeting distributed to shareholders Wednesday, 26 September
Last day to trade in order to be eligible to vote at the General Tuesday, 23 October
Meeting
Record date in order to be eligible to vote at the General Friday, 26 October
Meeting
Last date to lodge forms of proxy for the General Meeting by Monday, 29 October
10h003
General Meeting at 18h30 Wednesday, 31 October
Results of General Meeting released on SENS Thursday, 1 November
Notes:
1. All times indicated in this Circular are local times in South Africa.
2. The dates and times indicated in the table above are subject to change. Any such
changes will be released on SENS and published in the press.
3. Completed forms of proxy must be lodged with the Transfer Secretaries, being
Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann
Avenue, Rosebank, 2196 or posted to the Transfer Secretaries at PO Box 61051,
Marshalltown, 2107, to reach them by no later than Monday, 29 October 2018 at 10h00,
alternatively, such forms of proxy may be handed to the chairman of the General Meeting
at any time before the appointed proxy exercises any Shareholder rights at the General
Meeting.
Cape Town
26 September 2018
Sponsor
PSG Capital
Date: 26/09/2018 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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