Lights On at Ngai Lik
1 September 2003
Oh, what a wonderful thing a little publicity is. Following our article of Friday about the refusal of Ngai Lik Industrial Holdings Ltd (Ngai Lik, 0332) to disclose voting figures, the company has now published on its web site the results of the poll we demanded at its AGM, so this issue has been resolved, and hopefully this means they will publish the results of all future shareholder meetings in the same way.
The official results show 30,219,000 negative votes against the general issue mandate. Ngai Lik, like most companies, does not comply with the recommendations of our Project Vampire, which seek to restrict the mandate in line with the international best practice, to a maximum issue size of 5% new shares issued for cash without a rights issue, and a maximum issue discount of 5%.
Based on the latest disclosures before the meeting, the holdings of the directors amount to 323,563,176 shares or 40.82% of Ngai Lik, and of course, they would vote in favour of granting themselves the mandate. But if you exclude those votes from the official figures, then you will see that a majority of independent investors voted against the mandate, as follows:
So there is yet more proof, as if proof was needed, that investors are opposed to the general mandate, because they believe, as part-owners of listed companies, that the mandate is more likely to destroy shareholder value than create it. Score another bite for Project Vampire. The only question is, when will the Listing Committee and the Stock Exchange get the message and amend their Listing Rules?
In the meantime, we urge Ngai Lik to take this clear message from investors into account and amend their general mandate proposal at next year's AGM. Webb-site.com editor David Webb is a shareowner of Ngai Lik.
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