South African investment group Investec faced a shareholder revolt at the AGM held on 8 August. Shares in the dual-listed firm are quoted on the London Stock Exchange and the Johannesburg Stock Exchange. The company faced a revolt by shareholders over the reappointment of its auditors. Some 12.88% voted against the reappointment of EY as auditors to Investec plc. However, a higher percentage voted against the joint auditors for Investec Ltd, EY and KPMG. EY received nay votes adding up to 16.56% of those cast while more than one in five who voted, cast their votes against KPMG, with 20.07% voting against, clearing significant threshold.

In accordance with the UK Corporate Governance Code, with respect to resolutions with more than 20% of votes cast against, the group is required to explain how it will consult shareholders in order to understand the reasons behind the result.

In its statement following the AGM, the board of Investec said that it ‘recognises that effective communication is vital and is committed to providing meaningful, transparent and timely information to stakeholders’.

The statement went to say: “The Audit Committee identified audit quality as a Key Audit Matter as defined by auditing standards and accordingly spent considerable time gaining assurance in this regard and included specific additional procedures to satisfy itself regarding audit quality, audit firm transparency processes, auditor independence and objectivity and auditor rotation planning, where Investec Limited is and intends to remain compliant with the mandated requirements around Mandatory Audit Firm Rotation (MAFR). Regarding KPMG Inc., a number of specific additional processes both at a local and international level were implemented to ensure and confirm audit quality.

“These matters have been explained in detail in the group’s 2019 Audit Committee Report, contained in the 2019 integrated annual report. These matters have been discussed at length with the group’s largest shareholders. The Board will continue to engage with shareholders and consider shareholder feedback in developing and refining its policies and practices. In accordance with the UK Corporate Governance Code an update will be provided within six months of the AGM…”

Investec Ltd’s latest annual report show total payments to EY and KPMG reaching £15.101m, of which EY was paid £10.236m and KPMG £4.865m.