CITIC Pacific Voting Recommendations
25 April 2003
| Company: | CITIC Pacific Limited (CP) |
| Stock code: | 0267 |
| Date of meeting: | 06-May-03 |
| Time of meeting: | 10:30 |
| Advice date: | 25-Apr-03 |
| CCASS voting cut-off | 30-Apr-03 (due to 1-May holiday, so 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 and a special dividend | FOR |
| 3.1 | Re-elect Henry Fan Hung Ling | FOR |
| 3.2 | Re-elect Li Shilin | FOR |
| 3.3 | Re-elect Carl Yung Ming Jie | FOR |
| 3.4 | Re-elect Hamilton Ho Hau Hay as INED | AGAINST |
| 3.5 | Re-elect Alexander Reid Hamilton as INED | AGAINST |
| 3.6 | Re-elect Hansen Loh Chun Hon as INED | FOR |
| 4 | Reappoint PriceWaterhouseCoopers | 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 3.4
Hamilton Ho Hau Hay is proposed for re-election as an independent non-executive director (INED) of CP. His younger brother, Norman Ho Hau Chong, is also an INED of CP (but is not up for re-election this year). Hamilton joined the board in 1992 and Norman in 1994.
Their father is Ho Tim, the 94-year old co-founder and director of Hang Seng Bank Ltd (0013). CP does not list its Principal Bankers in its annual report, so we don't know whether it has a relationship with the bank or its parent, HSBC.
We think it is inappropriate to have INEDs who are related to each other. We already have controlling families who dominate the boards of Hong Kong listed companies, so we believe independent directors should not only be independent of the management but also independent of each other.
Incidentally, Hamilton and Norman's sister Chu Ho Miu Hing is married to legislator David Chu Yu Lin, who Chairs Wah Tak Fung Holdings Ltd (0297). But we won't blame the brothers for that!
Item 3.5
Alexander Reid Hamilton is proposed for re-election as an INED. He was first appointed in 1994. Prior to that, for 16 years he was a partner of PriceWaterhouseCoopers, who are CP's auditors. He is also an INED of COSCO International Holdings Ltd, COSCO Pacific Ltd, DBS Kwong On Bank Ltd (now private), Esprit Holdings Ltd and Shangri-La Asia Ltd, all of whom are audited by PriceWaterhouseCoopers.
He is also an INED of IMI Global Holdings Ltd, formerly known as Boto International Holdings Ltd before it sold 99% of its core business in a controversial buy-out transaction last year with Carlyle. In the initial announcement of that transaction, which was a connected transaction, Mr Hamilton was included as having opined that the proposed sale price was "fair and reasonable" even before independent financial advisers had been appointed to advise the INEDs.
In the end, after our opposition to the proposal, the deal was restructured and the price increased a little, and even then, the independent financial adviser said the deal was not fair and reasonable and recommended shareholders to vote against it, going against management, the first time an IFA had done so in Hong Kong in about 10 years.
When we called Mr Hamilton soon after the original buy-out proposal was announced, he declined to discuss the transaction with us or listen to our views. Eventually, he was found to have a potential conflict of interest due to his directorship of DBS Kwong On Bank Ltd, as another DBS subsidiary was advising Carlyle. So he did not take part in recommending the final transaction or attend the shareholders meeting. But in our opinion, he was not responsive or helpful to us as an independent shareholder, and we would oppose his election as an INED of any company. Independent shareholders need independent directors with whom they can communicate.
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.
© Webb-site.com, 2003
Organisations in this story
People in this story
Sign up for our free newsletter
Recommend Webb-site to a friend
Copyright & disclaimer, Privacy policy