Thursday 22nd April 2010

Dear Reader,

NEW ARTICLES
The Post Office Investment Fund
Following yesterday's Audit Commission report on Hongkong Post, we look at the potential closure of rural post offices, removal of its mail monopoly and universal service obligation, and its cash-rich balance sheet and prime property. We also discuss the Government's tendency to stash pots of money away in different bodies rather than pass recurrent spending through the budget and the Legislative Council and manage its liquid funds centrally.

Shareholders veto HKEx resolution
Following our recommendation, Webb-site.com is pleased to note that investors have sent a clear message, voting by 70.2% against a proposal to allow the company to bypass board meetings and pass resolutions with a simple majority of signatures. We now call on HKEx to make this right by amending the Listing Rules to prohibit such articles, which would weaken corporate governance.

RECENT ARTICLES
Imagi rights v shares gap
With Imagi's stock down 67.4% in 3 days since our bubble warning, the rights began trading this morning, at a huge discount to the share price, raising obvious questions of whether the market in either counter is false. If you own the shares and believe in the current valuation (which we don't) then why aren't you selling your shares and buying the rights to get free cash? (21-Apr-10)

Multiple statutory derivative actions
David Webb responds to the Legislative Council's invitation for comments on proposed amendments to the statutory derivative actions regime. In its current form it is unlikely to be useful to public shareowners of listed companies, but we suggest how to improve it. We also call on the Administration and Legislators to get behind class actions, litigation finance and contingent legal fees. Justice is the friend of fair societies, and litigation is the path to it. (18-Apr-10)

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