JACK OF ALL TRADES: SABMiller CEO Graham Mackay sits on the boards of three companies, which is against London Stock Exchange listing rules Picture: MARIANNE SCHWANKHART

This comes after the world's second-biggest brewer came under fire for poor governance at its AGM in August, where 15% of shareholders took the unusual step of voting against the proposal to pay SABMiller's directors £10.6-million (R156-million).

Governance advisors Pension Investment Research Consultants (PIRC) had advised investors to veto SABMiller's "excessive pay", and vote against re-electing six directors because they were not independent enough to truly protect smaller shareholders.

This unexpected rebellion caused jitters at SABMiller's London headquarters, and the company even asked its advisor, JP Morgan Cazenove, to find out which investors had vetoed the resolutions - an investigation that newspapers referred to at the time as a "witchhunt".

Now Botha has lodged a complaint with the Financial Services Authority (FSA) saying SABMiller has "not adhered" to the UK listing rules. These rules require companies on the London Stock Exchange to properly apply the "combined code of corporate governance", or "explain" why they have not.

For example, the UK governance code says a board "should not agree to a full-time executive director taking on more than one non-executive directorship in a FTSE 100 company".

However, SABMiller CEO Graham Mackay is a director of both Reckitt Benckiser and of tobacco company Philip Morris International Inc.

"I'm not saying Mackay shouldn't sit on other boards," Botha said this week. "But I wanted to know how much time Mackay was spending working at other companies. They refused to answer the question, so I felt I needed to take it further," he said.

In a letter replying to Botha on October 19, the FSA confirmed that Botha's concerns "will be considered", saying it was "looking into the issues you have raised".

"The listing rules require that public companies disclose how they have complied with the code, and explain where they have not applied the code ... (we) would be concerned if a listed company breached FSA rules relating to disclosure," it said. Botha raised other concerns, including the fact that he believes SABMiller is not complying with the governance code's stipulation that there should be a "formal, rigorous and transparent procedure" for appointing new directors. When asked at its AGM about its succession plans to replace 69-year-old chairman Meyer Kahn, 59-year-old CEO Graham Mackay, or 62-year-old financial director Malcolm Wyman, the brewer said this information was "confidential".

But SABMiller spokesman Nigel Fairbrass brushed off Botha's complaint.

"The FSA has confirmed to us that its response to Botha was an entirely standard one, and that it is obliged to respond to all complaints in this way," he said.

Fairbrass said the company is "confident" it does comply with the UK governance code. "We haven't heard from the FSA, and nor do we expect to hear from them," he said.

In its annual report, SABMiller did admit a couple of instances where it did not comply with the governance code.

For one, it said that in the first few weeks of 2008 at least half of its directors were not "independent", but it had corrected this by appointing two new directors by March. But there is some dispute about how SABMiller - and other companies - define "an independent director". Though board governance might appear to be a trifling debate, a key feature of major corporate scandals in recent years has been that the companies have typically had few truly independent directors that are able to put shareholder interests first.

While SABMiller claims it has eight "independent non-executive directors" on its 15-member board, PIRC argues that only five are truly independent. "Miles Morland, Cyril Ramaphosa and Lord Robert Fellowes are not considered independent due to their length of tenure on the board (more than nine years)," it said.

In his initial complaint, Botha said that while he understands that governance codes are not a "rigid set of rules", investors should be "frustrated by the poor quality and omission of pertinent information in SABMiller's annual report".

Another shareholder that raised concerns in August was the Public Investment Corporation (PIC), which holds 4.4% of SABMiller. CEO Brian Molefe was concerned about the lack of black executives at the company, saying "we need to raise this issue sharply with the company".

But Fairbrass said the PIC was invited to meet Meyer before the AGM to discuss any "issues of importance".

"Our CEO and finance director have offered to meet with the PIC even more recently this year. However, the PIC did not take up the offer," he said.