After a whack from the Takeovers Panel and a profit downgrade, DRA Global now hit with a first strike

Mining engineering group DRA Global has been hit with a big first strike on its pay report during an annual general meeting which has exposed significant shareholder anger over its board and performance. The vote came as DRA chairman Peter Mansell revealed the board disagreed with a finding by the Takeovers Panel that the company failed to keep shareholders properly informed about a secret internal power struggle that triggered the departure of chief executive Andrew Naude in March. “We don’t agree with that (Takeovers Panel) statement,” Mr Mansell said. “We took legal advice all the way along, we informed the market every time we were advised to.” Proxies filed before the hybrid AGM, DRA’s first since listing last year, show 46.75 per cent of shares were voted against its remuneration report, easily exceeding the 25 per cent threshold for the non-binding vote. The voting was repeated across all eight resolutions put to the meeting, including stock issues to directors, with each attracting a vote against of between 34.95 per cent and 46.75 per cent. It caps a disastrous 10 days for DRA, coming in the wake of the Takeover Panel’s adverse findings against the company and a trio of senior executives last week and a horror downgrade that has forced the suspension of its dividend and sent its shares to record lows. Shareholders used the AGM, which was broadcast from DRA’s offices in Johannesburg, to lash Mr Mansell and his fellow directors, the company’s financial accounts, board pay and the handling of a power struggle which was kept secret from the Australian Securities Exchange. Addressing the meeting, Mr Mansell welcomed a “significant reset” forced on the board by the revolt, but stopped short of addressing the regulatory criticism of its disclosure standards. He said that despite “the severe disruption and distraction” caused by an aborted board spill, the DRA board was “happy” with the resulting changes. On Monday, the Takeovers Panel banned the three DRA senior equity executives behind the power struggle, including interim chief executive James Smith, from joining the board or voting their shares for six months. The bans followed findings by the regulator last week that the trio had breached the Corporations Act by not disclosing their voting association to the Australian Securities Exchange. The panel also found that DRA had failed to disclose the power struggle “in a timely manner”. The three executives requisitioned a shareholders meeting to vote on the removal of Mr Mansell and chief executive Andrew Naude before agreeing a plan with the board for the peaceful departure of Mr Naude. However, DRA did not confirm the exit was linked to negotiations with the dissident executives until five weeks later, and then only after the internal brawl was laid bare by a complaint by its investor relations chief Haydn von Maltitz to the Takeovers Panel. Mr Mansell has blamed the rebellion on staff dissatisfaction with DRA’s transition from a privately owned professional services firm to a dual listed company last year. “We underestimated the impact on leadership and culture the transition needed, particularly in the middle of a pandemic that largely separated and disconnected our teams,” he told shareholders on Tuesday. The rapid changes caused deep divisions and “placed a strain on leadership at many levels”. However, despite the “differences” that emerged in January, some of which were still to be resolved, “the board is happy that a significant reset is well under way and is pleased to have been able to work with the senior leaders of DRA to address a number of difficult issues together”. Shares in DRA, which is controlled by staff, have lost $1.40 to $2 this year, including a collapse from $2.59 last week in the aftermath of a profit downgrade which warned shareholders to brace for a first-half loss in calendar 2022. The company has blamed losses on residual fixed-price construction projects in the Asia-Pacific that have blown out because of escalating costs and project delays.