South Africa’s central bank to sell shares of investors deemed to have too many

South Africa’s central bank on Thursday said it would put up for sale nearly 150,000 of its shares owned by people who had exceeded limits set by a court.

South African Reserve Bank Governor Lesetja Kganyago informed reporters in Pretoria that the aim was to prevent undue influence.
Kganyago said the bank had identified certain people amassing shares, adding that this posed danger to the bank’s independence. He, however, did not identify the shareholders.

“These shareholders who decided to buy shares as families and as associates, you could see that they were trying to exert undue influence, or influence disproportionate to the statutory limit,’’ Kganyago said.

Shares in the bank may be acquired by means of an over-the-counter share trading facility and earn a dividend of 10 South African cents per share annually.

A court ruled in 2016 that anyone holding more than 10,000 shares in the central bank must sell their extra shares in line with a 2010 amendment to the constitutional act to bring down the statutory limit.

The amendment also limits the rights of shareholders to nominate non-executive directors, vote on remuneration or the appointment of auditors, the bank said.

Discontent around the racial profile of economic ownership and wealth in South Africa has increased in recent years.

This is due to slow economic growth, unemployment climbing to record high, and poverty levels fuelled crime and political uncertainty.