Hongkong Electric Holdings Limited AGM 2003

Company:	Hongkong Electric Holdings Limited (HKE)
Stock code:	0006
Meeting type:	Annual
Date of meeting:	15-May-03
Time of meeting:	12:00
Advice date:	05-May-03
CCASS voting cut-off	12-May-03 VOTE NOW
Notice of Meeting:	Click here
Voting method:	Webb-site.com will require a poll, all proxies will be counted

Note to journalists:
We have up to 4 proxy seats available inside this AGM. Please contact us if you want one.

Item	Description	Vote
1	Adopt the accounts	FOR
2	Declare a final dividend	FOR
3	Re-elect Ralph Shea	FOR
3	Re-elect Wong Chun-hin	AGAINST
4	Re-appoint KPMG	FOR
5	Mandate the directors to issue additional shares	AGAINST
6	Mandate the directors to repurchase shares	FOR
7	Mandate the directors to issue repurchased shares	AGAINST

Reasons AGAINST

Item 3 (second candidate)

Unfortunately the election resolutions are not separately numbered, so make sure you vote against the second candidate, not the first one. Mr Wong Chun-hin is currently an independent non-executive director of HKE, which would be fine, apart from the fact that he is also an INED of controlling shareholder Hutchison Whampoa Limited (HWL, 0013). We think it is inappropriate for a person to be an INED of both a listed company and its controlling shareholder, because this gives rise to potential conflicts of interest between the two roles. If HWL and HKE were to announce a connected transaction, it is likely that Mr Wong would be conflicted out of advising independent shareholders of both companies on whether the deal was fair and reasonable or not. So he should give up one of the two directorships, and since HKE comes up first, we oppose his re-election.

Surely INEDs are not so scarce that the group has to use the same person in more than one listed company, but that is what they choose to do.

Items 5 and 7

Webb-site.com urges all investors to vote against the general issue mandate for all listed companies, for the reasons explained in Project Vampire, unless they comply with the recommendations set out in that article. The non-pre-emptive issue mandate allows management to choose the shareowners by allotment of shares. This corrupts the governance mechanism. Shareowners should govern management, not the other way around. If a company wishes to raise cash by issuing shares, then it should do so by rights issue.

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Voting recommendations

Reasons AGAINST

Item 3 (second candidate)

Items 5 and 7