Chilanga Shareholders reject K60 dividend

Chilanga Shareholders reject K60 dividend
Published: 31 March 2004

CHILANGA Cement Plc shareholders last Friday rejected a K60 dividend offer arguing for an amount that reflected the company’s good performance for 2003. But the dividend was passed by division, after a proxy delegate for the majority shareholders voted in favour of the motion.  At the company’s annual general meeting, the shareholders rejected K60 dividend arguing that they were equally entitled to reap the benefits of the company’s good performance, as were management and other employees.

"We are not running a wage freeze in this company and just like the directors and other employees, shareholders are entitled to rewards when the company is performing well," one shareholder, Andrew Kashita, observed to applause from the other shareholders.  When the matter was put to a vote, the shareholders voted 64-37 against the proposed dividend.  However, Lafarge South East Africa chief financial officer Victor Dingle turned the tide when he supported the proposed dividend as a proxy representative for the two major shareholders.

"I propose that the dividend resolution be passed as read," Dingle said. "I hold the proxy for Pan African Cement Ltd with 50.1 per cent shareholding and Financiere Lafarge with 33.95 shareholding."  Both Pan African Cement and Financiere Lafarge are wholly owned by French cement production giant Lafarge group.  In defending the dividend offer, Chilanga Cement company secretary George Varghese said the company needed a high level of expenditure to maintain infrastructure and build its capacity to meet the increasing market demand.  Varghese noted that while it appeared small, the dividend was K20 higher than that paid out last year.

And responding to concerns on whether the polypropylene packaging for Mphamvu cement was environmentally friendly, company chief executive Ian Coulter said the packaging was changed because paper packaging had become expensive.  "We used to import the paper packaging that we were using before from Zimbabwe but the customs changes effected in the recent past made it very expensive for us and threatened the supply chain," Coulter said.