Saturday 1 October 2011

E&O Minority Shareholders grill the Managing Director

Good: "The six-hour meeting started with minority shareholders taking the chance to grill E&O managing director Datuk Terry Tham Ka Hon on his share sale with Sime Darby Bhd." 

Bad: "Generally, many minority shareholders as well as MSWG were not satisfied with the replies given to the questions raised at the meeting"

Bad: "The media was not allowed to enter the meeting" (authorities really should try to do something about this, either by changing the rules or putting more pressure on companies to allow the press to attend AGM's or EGM's)

Strange: "why ECM Libra decided to seek representation on the board" (only holding 6.4% of the shares)

Strange: "Sime Darby has not nominated any representation to the board" (holding 30% of the shares)

Disappointing: the long time that the Securities Commission needs for its decisions (but these are tough decisions and I am hoping for not only good and fair decisions but also the reasoning behind them for future cases)

Disappointing: that the big players in this saga hardly ever mention the rights or the plight of the Minority Shareholders, the mentality Anno 2011 is scary to say the least. There are luckily many companies in Malaysia with a better attitude, the way the Board of Directors of SP Setia reacted on PNB's offer is just one example.


The Saga continues .....


http://www.btimes.com.my/Current_News/BTIMES/articles/EOREJ-2/Article/index_html

ECM fails in E&O board bid

By Zaidi Isham Ismail

Kuala Lumpur: Eastern & Oriental Bhd's (E&O) shareholders voted against having two new directors nominated by ECM Libra Financial Group Bhd in a marathon meeting yesterday.



The six-hour meeting started with minority shareholders taking the chance to grill E&O managing director Datuk Terry Tham Ka Hon on his share sale with Sime Darby Bhd.

A minority shareholder told Business Times that the initial part of the meeting were mainly questions from minorities for Tham.

"They wanted to know, among others, why he didn't insist on a general offer. He said since the matter is under investigation, he cannot say much," the shareholder said.

The Minority Shareholder Watchdog Group (MSWG) confirmed that these were among the questions raised.



"Generally, many minority shareholders as well as MSWG were not satisfied with the replies given to the questions raised at the meeting," the MSWG said in a statement.

The media was not allowed to enter the meeting, in which lawyers Mahadzir Azizan and Leong Kam Weng, nominees of ECM, introduced themselves. But they failed to win the seats after voting was carried out by poll.

E&O deputy managing director Eric Chan Kok Leong said 75 per cent voted against the election of Mahadzir and Leong, while the remaining 25 per cent voted for. Some 60 per cent of E&O shareholders turned up.

"Sime Darby has not nominated any representation to the board. We haven't had our first meeting yet but we plan to meet in October to discuss the next plan of action," Chan told reporters after the meeting.

Analysts expected the meeting to be emotionally charged as shareholders did not enjoy the same premium paid by Sime Darby to buy a 30 per cent stake in the Penang-based property company.

Sime Darby paid RM2.30 a share, a 60 per cent premium to the market price then.

The sellers were Tham, Singapore's GK Goh Holdings Ltd and Tan Sri Wan Azmi Wan Hamzah. Sime Darby has defended the deal, saying it may do so in the future.

ECM Libra, an investment bank, holds some 6.42 per cent of E&O.

Chan described the mood of shareholders as high in energy and excited to meet the management.

However, he sidestepped questions on more details of the Sime Darby-E&O collaboration. He said shareholders were seeking clarity on the collaboration during the meeting and did not elaborate.

Chan also does not know why ECM Libra decided to seek representation on the board.

For future plans, Chan said the group is focused on promoting E&O's brand to sustain growth for the long term.

On its joint venture with subsidiaries of Khazanah Nasional Bhd and Temasek Holdings Pte Ltd to develop a township in Iskandar Malaysia, Chan said the masterplan has been approved but it will be revised by both parties one more time.

"We will resubmit in January 2012 and expect another six months for it to be reviewed by the authorities," said Chan.

6 comments:

  1. For those interesting AGMs, they can get proxy from other shareholders to attend the meeting or maybe buy 100 shares to attend the meeting... Transaction cost to buy and sell the 100 shares later is less than RM 30

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  2. Exactly. But others also can facilitate, MSWG can ask shareholders who can not attend to give them the proxies, each shareholder can have 2 proxies. Government funds also can help. David Webb used to organize this in Hong Kong, he asked which shareholders would not attend and give their places to journalists.

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  3. I cannot fathom why the SC is taking such an inordinately long time to come out with their decision. At least they should set a deadline as to when they will give a ruling.

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  4. Avatar, I agree, but it is a difficult and big case, and many are watching it.

    I think they might want to decide about all aspects in one decision (MGO for all shareholders, insider trading). The MGO is the most urgent and can actually be separated from the insider trading. But may be I am wrong, it is difficult, let's wait for the decision.

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  5. Strange: "Sime Darby has not nominated any representation to the board" (holding 30% of the shares)

    One of the criterias that determines whether there is MGO or not is change of control in the company. Other being premium paid and party acting in concert

    If Sime brings in new Board member now, it will increase the lokelihood of MGO. I guess they will do so only after the issue on MGO has settled down.

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  6. Yes, you are probably right, games are being played.

    But I don't like it, it should not matter if Sime Darby will announce its directors now or later on.

    Neither do I like vague statements from Sime Darby like "may be a MGO for all shareholders in a later stage". That is hardly an assurance for the minorities, they want to know for sure: when and at what price.

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