HK Electric Voting Recommendations
5 May 2003
| Company: | Hongkong Electric Holdings Limited (HKE) |
| Stock code: | 0006 |
| Meeting type: | Annual |
| Date of meeting: | 15-May-03 |
| Time of meeting: | 12:00 |
| Advice date: | 05-May-03 |
| CCASS voting cut-off | 12-May-03 VOTE NOW |
| Notice of Meeting: | Click here |
| Voting method: | Webb-site.com will require a poll, all proxies will be counted |
Note to journalists:
We have up to 4 proxy seats available inside this AGM. Please contact
us if you want one.
| Item | Description | Vote |
| 1 | Adopt the accounts | FOR |
| 2 | Declare a final dividend | FOR |
| 3 | Re-elect Ralph Shea | FOR |
| Re-elect Wong Chun-hin | AGAINST | |
| 4 | Re-appoint KPMG | FOR |
| 5 | Mandate the directors to issue additional shares | AGAINST |
| 6 | Mandate the directors to repurchase shares | FOR |
| 7 | Mandate the directors to issue repurchased shares | AGAINST |
Reasons AGAINST
Item 3 (second candidate)
Unfortunately the election resolutions are not separately numbered, so make sure you vote against the second candidate, not the first one. Mr Wong Chun-hin is currently an independent non-executive director of HKE, which would be fine, apart from the fact that he is also an INED of controlling shareholder Hutchison Whampoa Limited (HWL, 0013). We think it is inappropriate for a person to be an INED of both a listed company and its controlling shareholder, because this gives rise to potential conflicts of interest between the two roles. If HWL and HKE were to announce a connected transaction, it is likely that Mr Wong would be conflicted out of advising independent shareholders of both companies on whether the deal was fair and reasonable or not. So he should give up one of the two directorships, and since HKE comes up first, we oppose his re-election.
Surely INEDs are not so scarce that the group has to use the same person in more than one listed company, but that is what they choose to do.
Items 5 and 7
Webb-site.com urges all investors to vote against the general issue mandate for all listed companies, for the reasons explained in Project Vampire, unless they comply with the recommendations set out in that article. The non-pre-emptive issue mandate allows management to choose the shareowners by allotment of shares. This corrupts the governance mechanism. Shareowners should govern management, not the other way around. If a company wishes to raise cash by issuing shares, then it should do so by rights issue.
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