Wheelock voting advice
10 August 2003
| Company: | Wheelock and Company Limited (Wheelock) |
| Stock code: | 0020 |
| Meeting type: | Annual |
| Date of meeting: | 21-Aug-03 |
| Time of meeting: | 09:15 |
| Advice date: | 10-Aug-03 |
| CCASS voting cut-off | 15-Aug-03 VOTE NOW |
| Notice of Meeting: | Click here |
| Voting method: | Webb-site.com will require a poll, all proxies will be counted |
| How to vote: | See our voting guide |
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(a) | Re-elect Alexander Au Siu-kee | FOR |
| 3(b) | Re-elect William Turnbull | FOR |
| 4 | Re-appoint PriceWaterhouseCoopers | FOR |
| 5 | Mandate the directors to repurchase shares | FOR |
| 6 | Mandate the directors to issue additional shares | AGAINST |
| 7 | Mandate the directors to issue repurchased shares | AGAINST |
| 8 | Amend the Articles of Association | FOR |
Reasons AGAINST
Items 6 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 choose management, not the other way around. If a company wishes to raise cash by issuing shares, then it should do so by rights issue.
If your company offers new shares to other investors at a discount, but not to you, then your company is transferring value from you to the new investors. Their gain is your loss. That's why we believe an issue for cash should be done by rights issue, failing which it should be limited to 5% of existing issued shares and a maximum discount of 5%.
This year so far, a majority of independent investors in 10 Hang Seng Index companies: Cathay Pacific, Cheung Kong Infrastructure, China Unicom, CITIC Pacific, Legend, MTRC, PCCW, Shanghai Industrial, Swire Pacific and Television Broadcasts have all voted against the issue mandate. In July, another index member, Johnson Electric, became the first member to modify their mandate to partially comply with the Project Vampire recommendations by cutting the size of the mandate to 5% of existing issued shares. HSBC, as a UK company, also complies.
Their fellow index members would do well to take note of this. After all, we don't mandate boards to buy back shares from chosen shareholders at a premium to market price, so why should they be allowed to issue shares to chosen shareholders at a discount?
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