Business Practices Committee Report 79

The payment of dividends on a monthly basis commenced during April 1999 and was discontinued during February 2000. On 13 January 2000 Metro wrote to "X". The following is a quote from this letter:

"Firstly we would like to wish you a very prosperous New Year. We would also like to take this opportunity of welcoming you to the Metro Cash Loans Ltd Shareholders Club.

You as a Shareholder make it all possible for us.

On a bit of a serious note, we would like to notify you when you can expect your dividends. Dividends are paid on the following dates:- 1st - 7th February 2000. Thereafter, between the 1st and 7th of each following month.

Service excellence is the most sought after commodity, which we at Metro can offer. Should you have any enquiries, please do not hesitate to contact the undersigned".

On 8 March 2000 Metro sent a circular to its shareholders. Included in the circular was the following statement:

"Metro Cash Loans Ltd have been advised by our legal representatives to cease paying monthly dividends with immediate effect, due to the fact that the Bank Act and Company Act states that dividends are to be payed (sic) on a quarterly basis. It is therefore illegal for us to pay dividends every month. Please expect your next payment on the following date:- 7th April 2000 - R5250".

This notification obviously upset shareholders such as "X". The payments on a quarterly basis commenced during March 2000.