1998 Telegraph series - wrap of week six

By Stephen Mayne
January 17, 2008

The 12th story in Stephen Mayne's 14-part series on AGM Season 1998 for The Daily Telegraph looked at what happened in week six.

The pace barely slowed in week six of the annual meeting season as three of the 10 biggest meetings took place and several high-profile Sydney entrepreneurs faced shareholders. The week was a blend of June 30 balance day companies and retailing giants Coles Myer and Woolworths which close their books on July 31.

The marathon Woolies AGM on Monday was particularly tiresome as shareholder after shareholder dwelled upon trivial customer issues such as trolleys and toilets, rather than focusing on shareholder issues at one of Australia's top performing companies. No one picked up on the suggestion raised here last Monday that chairman John Dahlsen should perhaps not remain on the ANZ board now that Woolies has hitched itself to a major venture with the Commonwealth Bank.

Mr Dahlsen delicately spread the questions between outgoing and highly regarded chief executive Reg Clairs and Roger Corbett, who appears to have been fast-tracked into the top job in return for rejecting the crown at David Jones. This issue was also not canvassed with any depth.

Fresh from the high of opening the $380 million refurbished Grace Brothers flagship in Sydney, the Coles Myer board were fortunate to wrap their meeting up within two hours after a measly nine questions from the floor.

The contrast with the six hour marathon of 1996, when the Yannon controversy was at its peak, could not have been more stark.

The GIO meeting on Tuesday was also a touch shorter than some predicted, even though chairman David Mortimer eloquently tiptoed though two hours of emotive and sometimes very well-informed questioning. The $3.1 billion AMP bid was at the forefront of everybody's mind, but the mood would suggest AMP will need to lift its offer if the bid is to succeed.

The Capitol Theatre was certainly an appropriate venue, given the theatrics in what has been a bitter takeover battle, but AMP totally rejects suggestions it planted stooges to ask questions. I personally wish AMP and other major institutions would all get up and openly ask questions at every AGM.

Companies would have performed far better if institutions were more pro-active in ousting poor directors and management rather than expressing their views in private and then voting silently with their feet by selling out.

California's state super fund lists the 10 worst performing companies each year. AMP should do likewise. That would focus the minds of boards and give shareholders more relevant debate at AGMs.

The Hoyts annual meeting on Wednesday was a classic example where institutions could have made for a much better meeting. A mere 30 Hoyts' shareholders showed for the 3pm meeting at the impressively renovated Broadway cinema complex in Sydney. After a representative of the Myer family quizzed what turned out to be a typographical error in the annual report, I asked a couple of questions about Hoyts' debt levels and struggling US operations.

Only one other shareholder spoke at the meeting and had a spirited go on the theme that Hoyts only utilised 18 per cent of its seating capacity.

I then had a second tranche of questions but the meeting was still all wrapped up in about one hour and some really pressing questions from institutions would have gone a long way, given that Hoyts has been one of the worst performed stocks this year - thanks to problems in America.

Chairman David Gonski should be commended for at least dealing with the US and share price problems up front. Hoyts chief executive and 25 per cent shareholder Peter Ivany was one of four Sydney entrepreneurs who faced shareholders this week.

On Wednesday, Rodney Adler attended his last FAI meeting and it was disappointing he did not speak to the meeting - preferring to whisper answers to chairman John Landerer. Mr Landerer shirked my question about why the Adler family got 75c cash for 15 per cent of its FAI stake when all other shareholders have to take mostly HIH shares as part of its takeover bid.

He said I should ask HIH and Mr Adler this question. Surely the FAI AGM was an appropriate forum to discuss this preferential treatment. FAI, though, met an impressive small shareholder Andrew Little who took the floor for about 10 minutes with some well researched questions. He pointed to FAI's last four years of underwriting losses - $79 million, $50 million, $70 million and $82 million - and asked but was not told why this hadn't been turned around.

Paul Ramsay, who controls hospital group Ramsay Health Care and Prime Television, fronted shareholders on successive days this week and, in quite a break from tradition, faced criticism about Prime's problems after buying Channel Nine in Argentina for $230 million last year.
Mr Ramsay's estimated wealth of $350 million in now likely to be closer to $200 million.

This is because Prime shares have halved since the foray into Argentina and hospital stocks remain troubled by perceptions about tumbling private insurance numbers.

Alan Rydge was the other low-profile Sydney Rich List figure to front shareholders on Thursday at Amalgamated Holdings - owners of Rydges Hotels, the Thredbo ski resort and Greater Union cinemas. Mr Rydge did not deal with this year's share slump up front but was very open and friendly when I asked about it during the meeting, saying it was overheated at $7.50 and had been affected by Thredbo, sentiment problems with Hoyts and Village Roadshow and threats by the ASX to throw it out of the All Ords. After the meeting, Mr Rydge said he enjoyed facing questions for a change as it gave him a chance to deal with issues not raised in his address.

With just one week to go in AGM season 1998, it would seem most directors are becoming well-adjusted to the concept of small shareholders getting actively involved. This is a heartening development. It is their company, after all. If only our lemming-like institutions would take the same approach.

* Stephen Mayne has bought shares in 50 companies for this series.

: Week Six
THE AGENDA: Woolworths, Adsteam Marine, Brian McGuigan Wines, Redfire Resources, South East Telecasters, Tandou, Australian Consolidated Investments, GIO, Mayne Nickless, FAI, Hoyts, Prime Television, Australian Worldwide Exploration, Emperor Mines, Ramsay Healthcare, Amalgamated Holdings, Coles Myer.
LONGEST BATTLE: Woolworths: four hours
TRUANT DIRECTOR: Redfire director Rene Rivkin failed to show, preferring other commitments in Melbourne. He also missed the Abednego Nickel meeting last month.
CHAIRMAN'S GAG: "The Hoyts AGM may not be the best attended but there are not many that have Meg Ryan, Tom Hanks and a pig giving controversy to the meeting" - Hoyts chairman David Gonski after showing trailers of upcoming movies.
WAY OFF THE MARK: "Does the chairman have any reason to suspect that any of the large shareholders have been involved in money laundering."
-Coles shareholder, asking one of most inaccurate questions of the season
TRIVIALITY: Several Woolworths shareholders who raised petty customer issues about toilets, trolleys and the like.
GAGGED: Jack Tilburn at GIO after a tirade some thought related more to the insurer winning a fraud battle against him this year rather than its overall performance.