CLP voting recommendations
22 April 2003
| Company: | CLP Holdings Limited (CLP) |
| Stock code: | 0002 |
| Date of meeting: | 05-May-03 |
| Time of meeting: | 11:00 |
| Advice date: | 22-Apr-03 |
| 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.a | Declare a final dividend of $0.51 per share | FOR |
| 2.b | Declare a special final dividend of $0.23 per share | FOR |
| 3.a | Re-elect P C Tan | FOR |
| 3.b | Re-elect Ronald James McAulay | FOR |
| 3.c | Re-elect William Fung Kwok-lun | FOR |
| 3.d | Re-elect Ian D Boyce | FOR |
| 3.e | Re-elect James Seymour Dickson Leach | FOR |
| 4 | Re-appoint PriceWaterhouseCoopers | FOR |
| 5 | Amend the Articles of Association | FOR |
| 6 | Mandate the directors to issue additional shares | AGAINST |
| 7 | Mandate the directors to repurchase shares | FOR |
| 8 | Mandate the directors to issue repurchased shares | AGAINST |
Reasons AGAINST
Items 6 and 8
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.
We note that the general mandate sought by CLP is limited to 10% of issued shares, rather than the 20% common in Hong Kong, but this still falls short of the 5% standard set in the UK, and no maximum discount for the issue price has been set, unlike the 5% maximum in the UK.
We hope that CLP will bring their general mandate into compliance with international best practice.
Comments
CLP is widely regarded as one of the local leaders in corporate governance, or in other words, one of the least bad in Hong Kong. They have a whole section dedicated to it on their web site. They have good reason to go out of their way to behave - their core electricity business hinges on a monopoly on supply to Kowloon and the New Territories of Hong Kong, which is governed by a Scheme of Control which has been criticised for its targeted return-on-assets formula which results in an incentive to over-budget generation capacity and over-invest in fixed assets. Despite having one of the most geographically concentrated populations in the world, where transmission and distribution costs should be lowest, Hong Kong still has some of the highest electricity tariffs in developed markets. The Scheme of Control comes up for renewal in 2008, and anything CLP can do to gain public support will help its negotiations with Government. And of course, those glossy PR campaigns featuring smiling happy customers are financed by the monopolistic tariffs they pay to CLP.
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