For the 4th time this season, investors in a Hang Seng Index company have voted against the general mandate, as we show below. The analysis of these figures is made possible by our Project Poll, which ensures that all the votes get counted, 1 share 1 vote, rather than a show of hands where proxies are ignored. For readers not familiar with it, Project Vampire (Vote Against Mandate for Placings, Issues by Rights Excepted) urges shareholders to vote against the general share issue mandate unless it complies with our recommendations, based on international best practice, which are:
As we explained in our voting recommendations, Swire Pacific (SP, 0019/0087) is the only remaining HK-listed company with two classes of voting ordinary shares. This allows privately held John Swire & Sons Ltd to control SP with 52.20% of the voting rights but only 29.0% of the equity. In addition, the annual report shows that directors (including trusts) hold a total of 1.24% of the voting rights. Together, the insiders account for 2,102,132,972 votes, or 53.44% of the voting rights. Assuming they voted in favour of their board's proposal, and deducting that from the votes "in favour" in the official poll results, then the voting of independent investors (those without board representation) on the issue mandate was as follows:
In other words, public investors voted by a margin of 57:43 against the general mandate. Total votes cast were about 33.69% of the votes held by the free float. This followed one day after investors at SP's associate Cathay Pacific voted 62:38 against the general mandate. Hopefully Swire will get the message and restrict the SP and CP issue mandates next year. The evidence is building that the public are opposed to the general mandate. Issuers ignore this at their peril, because it is a logical assumption that if investors say they want something, in this case a restricted general mandate, then they must attach some value to what they want, and will pay correspondingly more for a stock if they get it and less if they don't. Copyright Webb-site.com, 2003 Sign up for our free newsletter Recommend Webb-site.com to a friend Important notice: All material on this site, except where otherwise accredited, is copyright to Webb-site.com. Media and researchers are welcome to quote from articles on this site, provided that such quotation is attributed to Webb-site.com. The information in this site should not be relied upon by any person in making any investment decision. No responsibility or liability is accepted by Webb-site.com or any person related to it for any loss arising from or in reliance upon the whole or any part of the contents of this site. Persons who are in any doubt about an investment or potential investment should take professional investment advice. From time to time parties associated with Webb-site.com may own long or short positions in securities issued by or related to companies or governments on which we comment. |