External auditor appointment

Update on the Lonmin Plc Board’s response to significant vote against the reappointment of the external auditors

23 November 2017

At the most recent AGM on 26 January 2017, Lonmin Plc (the Company) experienced a significant vote against Resolution 3 (reappointment of KPMG as external auditors). In a statement published as part of the announcement of the AGM results, the Board commented that our major shareholder in South Africa (holding approximately 29.33% of voting rights) had recently adopted a policy which strictly required it to vote against the appointment of an external audit firm which had been in post for ten years or more. As explained in the same statement, such policy does not reflect the regulatory position in the UK. In accordance with the CMA Regulations and the  EU Audit Regulation, the external audit was put out to tender in 2015. Following a robust tender process, the Board’s conclusion at the time was that the reappointment of KPMG would best serve the interests of the Company and its shareholders.

The Board takes the views of shareholders extremely seriously, and has kept the topic of external audit high on the agenda since the date of the AGM. The board takes this opportunity to inform shareholders that it has committed to re-tendering for the role of external auditor and, in line with the requirements of the EU Audit Regulation, as implemented in the UK by the FRC, intends to put  a proposal to shareholders to appoint the new external auditor, at the January 2020 AGM at the latest.