Hutchison Whampoa voting advice
9 May 2003
| Company: | Hutchison Whampoa Limited (HWL) |
| Stock code: | 0013 |
| Meeting type: | Annual |
| Date of meeting: | 22-May-03 |
| Time of meeting: | 12:15 |
| Advice date: | 09-May-03 |
| CCASS voting cut-off | 19-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 Susan Chow Woo Mo Fong | FOR |
| Re-elect Dominic Lai Kai Ming | FOR | |
| Re-elect Simon Murray | FOR | |
| Re-elect Raymond Or Ching Fai | AGAINST | |
| Re-elect William Shurniak | FOR | |
| 4 | Appoint auditors | FOR |
| 5.1 | Mandate the directors to issue additional shares | AGAINST |
| 5.2 | Mandate the directors to repurchase shares | FOR |
| 5.3 | Mandate the directors to issue repurchased shares | AGAINST |
Note: the lack of numbering on the individual election resolutions adds to the confusion that voters may feel.
Reasons AGAINST
We are in favour of all candidates except Raymond Or Ching Fai (Mr Or). Mr Or is proposed for re-election as an independent non-executive director, but he has a conflict of interest because he is also General Manager of The Hongkong and Shanghai Banking Corporation Ltd (HSBC), which is a banker to both HWL and its 49.9% controlling shareholder, Cheung Kong (Holdings) Ltd (CKH, 0001).
Furthermore, Victor Li Tzar Kuoi (Deputy Chairman of HWL and CKH and son of Chairman and controlling shareholder Li Ka-shing), is also a director of HSBC, and this cross-directorship represents a further conflict of interest for Mr Or.
Regular readers will know that we have opposed "independent" directors re-elections at Hang Seng Bank, Hong Kong & China Gas, Bank of East Asia and Cathay Pacific for the same reasons. We are not alone in this - the New York Stock Exchange has recently submitted proposals to the SEC which frowns upon a company's bankers from being considered as independent directors, and in the UK, the Higgs report on non-executive directors made a similar recommendation that the UK Combined Code on corporate governance be amended to make clear that those whose employers have "material business relationships" with a company should not be considered as independent of that company.
Items 5.1 and 5.3
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.
If your company offers new shares to other investors at a discount, but not to you, then your company is transferring value from your shares 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%.
© Webb-site.com, 2003
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