How Proxy Votes Are Used To Ensure Outcomes

Photo: Fikray Anshor (Unsplash)

There are reportedly 805 members entitled to vote at general or special meetings of Pecanwood Homeowners Association. Of these, 20 votes are allocated to the owners of the golf course, country club and boat club.

Due to member apathy and a lack of involvement in past decisions made by the Pecanwood Homeowners Association, members find themselves in an untenable situation of corruption, unreasonable levies, excessive employment costs, unwarranted projects and a general disregard of the Memorandum of Incorporation (MOI).

The semblance of legitimacy attributed to the actions of the Homeowners Association can be directly linked to the manipulation of voting at members’ meetings. In order to achieve their objectives, the Homeowners Association uses proxy votes.

For those members not familiar with the term, a proxy is a person who has been appointed by an owner to attend, speak and vote or abstain on their behalf at a general or special meeting. A proxy is not necessarily another owner of the scheme. The proxy must be appointed in writing and a “proxy form” must be signed by the owner or by his or her authorised agent, who has also been appointed in writing. The signed proxy form must be handed to the chairperson before the meeting starts unless it is contained in a registered mortgage bond and the bond is produced at the meeting. A proxy form may include specific instructions on how the proxy should vote – if this is done then the proxy is bound to follow these instructions. Section 58 (1) of the Companies Act 71, 2008 regulates the term “proxy”.

One person could lobby other owners to authorise them to appoint the one person as their proxy, allowing the one person to vote for or against a resolution in a manner that best suits their needs. This is what has been taking place at Pecanwood Estate. Ill -informed or equally corrupt members have endorsed the actions of the Pecanwood Homeowners Association by appointing board members to vote on their behalf at meetings. Whether the proxy forms contained specific instructions on how to vote and whether those board members voted accordingly remains to be seen.

The Pecanwood Homeowners Association neglects to publish the voter details in the minutes of meetings. The minutes do not contain a list of stand numbers who were present at the meetings nor does it contain a list of stand numbers who elected to vote through the proxy system. If this was done members would be able to verify themselves if they became unwitting proxy voters due to forms being submitted without their permission. As the number of votes cast at meetings are representative of the member apathy, it would but take up a few pages of printing to record the details of the stand numbers who participated in the voting. As the stand numbers cannot be directly linked to street numbers or names the voter privacy that the Pecanwood Homeowners Association is hiding behind will still be maintained.

Another method to avoid issuing a proxy would be for members who are unable to attend meetings in person to vote through electronic means. This is the norm in shareholders’ and directors’ meetings where members are scattered around the globe. The Pecanwood Homeowners Association has in the past used Lumi Global for electronic and hybrid meetings. Due to tampering with the system to ensure voter outcomes, it has been detrimental to members to use the platform for voting. Should electronic means be provided to members who cannot attend in person, in the interest of transparency the Homeowners Association must publish the attendance audit provided by Lumi Global.

Unless complete transparency in the voting process and methods are maintained by the Homeowners Association, members will continue to be disadvantaged by corrupt practices.

Do not give your proxy to anyone unless you clearly understand what is at stake and how your proxy will be treated or for what purpose it will be used.

© Pecanwood Corruption Watch