Company AGMs: Dos and don'ts

[FFNow]

I have a question:

If shareholders present at AGM vote against a resolution, can the company take it as resolution is not passed and not do a voting by way of a poll?

If the company deems so, it can do voting by poll thereafter. By using polling, majority of shareholders present vote against (for example, they all make up 3% of total shares). The rest not present in the AGM (97% of shares), are deemed to have voted for the resolution. Am I right to say that? So, this can be deemed a "tactic" used by companies to pass a resolution that is not passed by show of hands, right?

[swakoo]

If shareholders present at AGM vote against a resolution, can the company take it as resolution is not passed and not do a voting by way of a poll?

From SGX company announcements http://info.sgx.com/webcoranncatth.nsf/V...D004050B9/$file/HFCSGXReply.pdf?openelement

HONG FOK CORPORATION LIMITED
(Company Registration No.: 196700468N)

RESPONSE TO SGX’S QUERIES REGARDING A BUSINESS TIMES ARTICLE AND THE COMPANY’S ANNUAL GENERAL MEETING

The Board of Directors of Hong Fok Corporation Limited (the “Company”) refers to the query received from the Singapore Exchange Securities Trading Limited (the “SGX”) on 27 April 2012 regarding an article in the Business Times and the Company’s annual general meeting held on 26 April 2012 and would like to respond as follows:
.
.
.
Query 2:

We note in the Article reported that "Shareholders rejected the directors' report and the audited results by show of hands . . . so the chairman proposed that all the resolutions be put through the poll," Please disclose whether this re-voting by poll after the vote has been rejected by a voting from show of hands was validly conducted in accordance with the Company’s articles of association. In addition, please disclose the Board’s views on why this decision to conduct the re-voting is in the best interests of the Company and its shareholders.

Response:

The manner in which the voting was conducted was in accordance with the Company’s articles of association and was therefore validly conducted and was procedurally regular. Article 79 of the Company’s articles of association provides that “At every General Meeting a resolution put to the vote of the meeting shall be decided on a show of hands by the Members present in person or by proxy and entitled to vote, unless before or upon the declaration of the result of the show of hands a poll be demanded (a) by the chairman of the meeting or (b) by any two (2) Members present in person or by proxy, and entitled to vote at the meeting, or © by …”.

In the Board’s view, it would be good to adhere to the procedure prescribed by the Company’s articles of association.
.
.

If the company deems so, it can do voting by poll thereafter. By using polling, majority of shareholders present vote against (for example, they all make up 3% of total shares). The rest not present in the AGM (97% of shares), are deemed to have voted for the resolution. Am I right to say that? So, this can be deemed a "tactic" used by companies to pass a resolution that is not passed by show of hands, right?

% taken into account should be based only on votes submitted, either by shareholders present or by proxy.

---

more from Hong Fok announcement:

Query 4:

In the interest of all shareholders, the Company should post the minutes of the AGM on SGXNET.

Response:

The Company refers to the procedure prescribed under the Companies Act for shareholders to obtain a copy of minutes of shareholders’ meetings, which is by submitting a request in writing to the Company, for which the Company is entitled to impose a charge not exceeding $1 for every page of the minutes.

The Company has agreed to accommodate the request, by certain shareholders, that was made verbally during the AGM and which shareholders wrote their names and particulars on a list provided by the Company, for a copy of the minutes of the AGM. For other shareholders who wish to request a copy of the minutes of the AGM, they are invited to submit a request in writing to the Company. The Company will accede to these requests, by furnishing a copy of the minutes of the AGM when these are prepared in due course.

Very lame. Companies Act should make it mandatory to post minutes of AGM on SGXNET.

[Stocker]

SGX dare not impose this , why ?

[FFNow]

Thanks for your reply, swakoo!

[wsreader]

According to a recent news report, disgruntled minority shareholders stormed out of the agm. I wonder whether this can be used to force the end of the agm due to quorum not present?

I noticed some agms were held at the western end of the island at 9am, making it unusually inconvenient for shareholders to attend. Have it ever happen that besides the directors, no other shareholder attended a agm? Maybe the company will call its staff who are shareholder to attend to fulfill the quorum?

[dzwm87]

It is quite common that minority shareholder stands to be screwed by the substantial shareholders. Yes, you have the opportunity to voice out but it doesn't mean people have to adopt to your opinions. Even in show of hand voting, minority shareholder can still lose out. The K-reit EGM last year was a clear stand of how minority shareholders can be played out.

Hong Fok case is really interesting and I am curious to see how things turn out.

[propertyinvestor]

According to a recent news report, disgruntled minority shareholders stormed out of the agm. I wonder whether this can be used to force the end of the agm due to quorum not present?

I noticed some agms were held at the western end of the island at 9am, making it unusually inconvenient for shareholders to attend. Have it ever happen that besides the directors, no other shareholder attended a agm? Maybe the company will call its staff who are shareholder to attend to fulfill the quorum?

Quorum is determined by Voting rights present. Not physical Humans. As long as 50% of voting rights present either in person or by proxy before the start of the meeting, a quorum is formed.

---

It is quite common that minority shareholder stands to be screwed by the substantial shareholders. Yes, you have the opportunity to voice out but it doesn't mean people have to adopt to your opinions. Even in show of hand voting, minority shareholder can still lose out. The K-reit EGM last year was a clear stand of how minority shareholders can be played out.

Hong Fok case is really interesting and I am curious to see how things turn out.

THe B******* Keppel Land proxied their employees to the meeting to screw the KREIT unitholders. I dunno why SGX and MAS allow this kind of nonsense to happen. WTF. Temasek Linked company doing this kind of SHI*.

---

Since u mentioned Kreit, and IIRC it did at least 2 massively dilutive renounceable rights issues in past years, i added it to the chart too to see where it stacks up - purple line:
(note: Kreit predominantly office reit, so comparison should be viewed accordingly)
.
.
Believe MBFC2 should be due for acquisition sometime and K'land is a co-owner, so u may not have to hold your breath for long.....

Thank you for the very useful comparison graphs which'd benefit many who are considering any REITs for long term investments. In my case, after many painful lessons (esp. during financial crisis), I don't think there are that many REITs that are suitable for long term hold. Many are more interested in the AUM as it translates to higher fees for themself. Instead of avoiding REITs (I still keep a few), I usually only get interested when they do an at least 10% free-fall in share price eg. massive rights issues. There's short term money to be made eg. >20% for the Starhill example as it dropped below 50ct before it recovered to 60ct+ (IIRC, within a year). Recent K-REIT one prob >10% to be made, more if you include div.

The problem is you would have made more on Keppel Land. Keppel Land jump >50% if you include dividends during the same period. K REIT is screwed.

---

If reits suck, then go for the reits manager that earn money when there's disposal or acquisition of asset. Everytime there's a right issue to acquire new property, AUM increases and fee increases as well. DPU increases, reits manager also got higher performance fee.

If only the price of the reit manager can dive down...

Keppel Land and Capitamalls asia both dived down last year to $2.20 and $1.19 respectively. You had your chance

[CityFarmer]

It is quite common that minority shareholder stands to be screwed by the substantial shareholders. Yes, you have the opportunity to voice out but it doesn't mean people have to adopt to your opinions. Even in show of hand voting, minority shareholder can still lose out. The K-reit EGM last year was a clear stand of how minority shareholders can be played out.

Hong Fok case is really interesting and I am curious to see how things turn out.

IMO, it is odd to me if the management listen to minority shareholder opinion, instead of substantial shareholders concern if the opinion conflict. Majority vote win in democracy, and applies to AGM by way of voting by poll.

IMO, Highly vocal minority does not represent majority view/opinion

SGX ruling does have protection for minority shareholder in other aspects.

[dzwm87]

IMO, it is odd to me if the management listen to minority shareholder opinion, instead of substantial shareholders concern if the opinion conflict. Majority vote win in democracy, and applies to AGM by way of voting by poll.

IMO, Highly vocal minority does not represent majority view/opinion

SGX ruling does have protection for minority shareholder in other aspects.

It depends on what's the case which requires the management to listen to minority shareholder opinion. If it's the usual AGM "trivial" which are totally not related to the company business, of course management don't need to care. But if there are genuine concerns to be raised, then perhaps, management should put on a listening ear - recent Starhill AGM is a good example where management listen to minority shareholders' opinions.

[Some-one]

According to a recent news report, disgruntled minority shareholders stormed out of the agm. I wonder whether this can be used to force the end of the agm due to quorum not present?

I noticed some agms were held at the western end of the island at 9am, making it unusually inconvenient for shareholders to attend. Have it ever happen that besides the directors, no other shareholder attended a agm? Maybe the company will call its staff who are shareholder to attend to fulfill the quorum?

Quorum is determined by Voting rights present. Not physical Humans. As long as 50% of voting rights present either in person or by proxy before the start of the meeting, a quorum is formed.

---

What would happen if the quorum is not met? Can the AGM still carry on? Are there such cases happening before?

It is quite common that minority shareholder stands to be screwed by the substantial shareholders. Yes, you have the opportunity to voice out but it doesn't mean people have to adopt to your opinions. Even in show of hand voting, minority shareholder can still lose out. The K-reit EGM last year was a clear stand of how minority shareholders can be played out.

Hong Fok case is really interesting and I am curious to see how things turn out.

THe B******* Keppel Land proxied their employees to the meeting to screw the KREIT unitholders. I dunno why SGX and MAS allow this kind of nonsense to happen. WTF. Temasek Linked company doing this kind of SHI*.

How do you know that Kepland proxied their employee to the meeting?