1998 Telegraph series - wrap of week two

By Stephen Mayne
January 17, 2008

This summary of week two of AGM Season 1998 was first published in The Daily Telegraph.

Maybe the questions aren't tough enough. But judging by the reaction of Kerry Stokes, Alan Jackson and Joseph Gutnick this week, Australia's high profile chairmen are keen for more detailed questions from shareholders at annual meetings.

While each was at times a little bit sensitive at receiving a string of consecutive and at times pointed questions from one shareholder, all professed that it was a good thing and I was a welcome interloper as part of this series on the 1998 annual meeting season.

Mr Stokes was particularly charitable, albeit after having a dig at me for not attending the annual meeting last week of News Corp, owner of The Daily Telegraph.

Then again, my suggestion the terms of the three million options for new chief executive Julian Mounter were too arduous for the Englishman given Seven's weak share price, was the sort of question every chairman would like to get.

However, it got a little rougher with territory covered including the apparent lack of a majority of independent directors and the treatment of axed chief executive Gary Rice.

Stokes also openly dealt with the apparent contradiction in axing several highly regarded Seven journalists, most notably Witness reporter Graham Davis, whilst not sacking David Richardson, the Today Tonight reporter caught blatantly fabricating footage on the Skase chase.

He said the Davis battle boiled down to a dispute with his executive producer and last week's settlement was "well less than half" reported figures of $1 million.

He agreed Richardson's action was "something we were not proud of" but deemed suspension was "the appropriate disciplinary action" and mistakes "should not impinge on a person's career forever".

It was a shame only one other of the 33 investors that turned up asked a question, which was whether shareholders would get preferential treatment in buying platinum memberships for Melbourne's new Docklands Stadium.

Several shareholders approached me after the meeting suggesting other questions that should have been asked, including one on Mr Stokes' trading in Seven shares shortly before the sale of struggling Hollywood studio MGM. However, they were not prepared to raise these issues themselves.

Shareholder apathy and timidity was on full display at some other meetings this week.

Steel and engineering group ANI was a classic example. This is a company fighting off an unwelcome bid from EDI and proposing a dramatic alternative merger of its steel business with the Smorgon family.

Yet shareholders could come up with about seven questions at the annual meeting on Wednesday, none of which really got to the heart of the issues.

Similarly, Joe Gutnick's stable of nine listed companies got through the week's AGMs with the only serious questioning coming from me at Centaur Mining on Wednesday.

The big question buzzing through the mining industry is the increasing control Robert de Crespigny is exercising over Gutnick's flagship gold miner Great Central.

But when it came to this meeting in Melbourne on Thursday, the only question came from one elderly shareholder who wanted to know if the directors ever went to the West Australian gold fields shown on the video presentation and got their feet dirty.

In spite of this, the Australian Shareholders Association had a relatively active week, asking questions at Mike Fitzpatrick's Australian Infrastructure Fund, Austrim, Wattyl, Pioneer International, Amcor, Austrim, GUD Holdings, Villa World and ANI.

Meetings clashing were another unfortunate feature of the week. Pioneer and Amcor disappointed investors who hold shares in both companies by failing to avoid a time clash of 11am in Sydney yesterday.

Perpetual Trustees and gas company AGL - both of which have much to boast about - did the same on Tuesday, as did tollroad company Transurban and Alan Jackson's Austrim in Melbourne on Thursday.

Jackson certainly wins the prize for having the most loyal following. In three years, 14,000 small shareholders have jumped on his latest bandwagon and 378 of them turned up at the annual meeting. Compare that with just 33 at Seven yesterday, 160 at Pioneer and an estimated 400 at paper giant Amcor, which was swollen by a large contingent of green shareholders.

And the voting down of an options package for GUD finance chief John Williams was a rare example of an institutional shareholder, Bankers Trust, backing the Australian Shareholders Association.

There should be more of it from these faceless institutions who rarely exert any public pressure on even the worst performing Australian companies.

Instead, they just vote with their feet.