A voice for change

THE walkout and calling for a boycott of the PLUS Expressways Bhd EGM on Wednesday by some minority shareholders is not surprising.

The minorities alleged procedural irregularities at the EGM and as they walked out of PLUS Menara Korporat, they were chanting the words “illegal EGM.''

But those who conducted the EGM denied any procedural irregularities, they claimed everything was done legally.

The EGM was called to vote on the UEM Group and Employees Provident Fund (UEM-EPF) takeover of PLUS for RM23bil or RM4.60 a share.

Despite the drama some want to think that it could have been orchestrated while others felt it was show of shareholder activism the promoters got the nod for the takeover.

About 800 people were at the EGM, and about 100 minority shareholder walked out although some had claimed the number to be “several hundreds.''

Whatever the number may be, what really irked the minorities was the voting procedure and the notion that even if they stayed, they could not have made a difference. To some, it was a “forgone conclusion that the proposal would be approved'' as the number of those in favour outnumbered the minorities.

The Wednesday minority walkout is neither the first one, nor will it be last. On Sept 24, 1999 about 500 shareholders walked out before a vote was called on the proposals tabled at the Unico Holdings Bhd EGM.

The bone of contention then was over the proposed restricted issue of 1 million new shares in Unico-Desa Plantations Bhd at an issue price of RM1.50 per share to the 17 directors of Unico and Unico-Desa, thus entitling them to a proposed bonus issue.

Again on June 14, 2003 a group of minority shareholders walked out of Kejora Harta Bhd's EGM as they were angered by the voting process for the proposed takeover of Rampai Niaga Sdn Bhd, which holds the Body Shop franchise.

In almost any company, the shareholders' primary voice comes in their opportunity to speak and vote at general meetings. Investors today, are willing to exercise their rights; to express dissatisfaction and take management to task.

In fact, shareholder activism is gaining ground, be it in the United States and Canada or Asia. Malaysia has its own Minority Shareholder Watchdog Group and Japan Ombudsman.

Shareholder activism involves any action taken by minority investors to improve the governance of companies, ensure fair treatment of all shareholders and raise company value over time. It is a vital part of “market discipline,” which is a key component in corporate governance reform, says a report. Activism has an important economic role too as it contributes to stronger, deeper capital markets.

If the minorities want changes then they have to be more pro-active during EGMs. As an interested party, they must let the company knows how it should be run. Bear in mind that carefully constructed views are often taken seriously save frivolous or vexatious remarks.

Casino mogul Kirk Kerkorian is someone who believes in changing the company's direction and to do that he buys a small stake in a company and sits on the board so that he can direct the board to change. His stake may be small given the fragmented shareholder structure of the US companies but he is also a billionaire.

So is Carl Icahn. Also known also “billionaire Robin Hood,'' he is often refered to as a corporate raider turned shareholder activist who puts pressure on companies to increase shareholders' value.

It all boils to fighting for your rights. There is nothing wrong with that so long you don't trample others along the way. The voice of the minorities is as important as other parties, though the major shareholders always get the upper hand when come to investment and voting rights. Perhaps, to make a difference, we need more Kirk and Carl's here but shareholder activism should not be about short-term gains for the company or the investor, it should be about long-term value. ● Deputy News Editor B.K. Sidhu feels that the choice to make a difference lies within us.

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