Frene Ginwala, the former speaker of the national assembly, could play
a crucial role in deciding whether a bid for news and financial data
provider Reuters by Canadian rival Thomson is successful, writes Justin Brown in Business Report.
Ginwala is one of 18 directors of the Reuters Founders Share Company, which was established in 1984 when Reuters became a public company to safeguard the independence and editorial integrity of the news agency. She was first appointed to the watchdog company in April 2004.
The Reuters Founders Share Company can call on a 30 percent "golden share" holding in Reuters to veto any deal, or force one through. Reuters' constitution forbids any shareholder owning more than 15 percent of the business.
If the directors of the Reuters Founders Share Company believe that any person, together with any associates, has obtained or is seeking to obtain control of Reuters, they may require the special voting rights attached to the golden share to be exercised.
The Reuters Founders Share Company, through these special rights, has the right to cast sufficient votes at any general meeting of the Reuters group to pass any resolution supported by it or to deflect any resolution it opposes.
The watchdog's directors may also require the votes attaching to the founders share to be cast against any resolution that may alter any of the articles of association of the Reuters group relating to the Reuters trust principles.
The Financial Times reported at the weekend that a preliminary approach, which Reuters announced on Friday without naming the bidder, was known to have been made by Thomson.
Click here to read the full report, posted on Business Report's website.ÂÂÂ
