SBM: Rs8 million for Chairman, lack of provisions for Rs743m legal claims

SBM Holdings, a major State-owned banking group in Mauritius, has held its 13th Annual General Meeting (AGM) amidst controversy and shareholder discontent. Sattar Hajee Abdoula was reappointed as the chairman, but the decision faced intense scrutiny from minority shareholders.

The AGM agenda included discussions on the company’s annual report, the renewal of Deloitte as the external auditor, and the election of directors. However, attention quickly shifted to Hajee Abdoula’s remuneration of the Chairman , reaching a staggering Rs 8.04 million in 2022.

Shareholders reportedly questioned the justification for such a substantial pay raise, particularly considering the Chairman’s troubled position in the past.

Nassir Ramtoola, a concerned minority shareholder, expressed disappointment at the lack of transparency regarding director responsibilities and urged a more comprehensive evaluation of their remuneration.

The dissatisfaction among shareholders was reportedly further fuelled by unresolved issues and unanswered questions raised by Bissoon Mungroo, who plans to seek a judicial review of the AGM due to the secretary’s failure to address the concerns from the previous year.

As SBM Holdings reported soaring pre-tax profits of Rs 4.18 billion in 2022, legal actions loomed over SBM Bank, with lawsuits from former employees and clients totaling Rs 743.4 million. The inadequate provisions set aside for these claims have reportedly added fuel to the fire, raising questions about the bank’s risk management and accountability.

As of December 31, 2022, the bank has only made a provision of Rs 70.9 million, leaving a substantial balance of Rs 672.5 million without any provisions. The bank’s rationale for the omission is based on the absence of indications that these claims will be pursued in court.

The AGM also revealed a call for unity among small shareholders, with the Hajee Abdoula encouraging them to present a unified proposal for Board representation.

Source: Defi Media