5 questions lodged at 2026 SDI virtual scheme meeting

Q1. We're a Melbourne-based company so why are we running this scheme through the NSW Supreme Court? Are Victoria's judges not as experienced in dealing with schemes? Is there a cost differential when it comes to choosing a jurisdiction?

Answer: The acting chair, NED Cameron Allen, threw this one straight to DLA Piper partner David Holland who seemed excited to get a chance to speak at a scheme meeting. His answer was excellent. They went with the NSW Supreme Court because Justice Black is so good, both legal teams were in Sydney and the Victorian Supreme Court rules are more expensive, requiring 3 court appearances versus 2 in NSW. Hmmm, we can't even compete on something as basis as bureaucracy around takeover approvals. That's one for an incoming Victorian Liberal Government to fix. Watch video of exchange via Twitter.

Q2. Have the non-executive directors been paid any exertion payments for all their additional hard work on this takeover deal and are any of them expected to continue in a paid role at the business once the takeover completes?

Answer: Well done to SDI for running a good debate. All 5 of these questions were read in full with no editing and all the answers were comprehensive and factual, such as this one. The respondent (it was hard to know her was talking as they didn't even offer video at this virtual EGM), said no exertion payments were paid to the NEDs, all of whom will be resigning once the deal completes. That's the way it should be. No extra payments for managing a takeover and no inducements to the recommending directors about ongoing work. Watch video of exchange via Twitter.

Q3. The latest annual report says that we have 2,083 shareholders. Were you pleased with the headcount turnout of 197 on the proxies? Also, thank you for disclosing the proxy votes to the ASX at 10.21am this morning, providing for a more fully informed debate at today's meeting. What sort of get out the vote campaign did we run to get retail shareholder participation up to 9.5% and were many of those voters staff?

Answer: SDI managed to get a solid 9.5% turnout on the proxy headcount data - 197 out of 2083 shareholders cast a proxy vote - without even running a solicitation campaign. The respondent (it was hard to know her was talking as they didn't even offer video at this virtual EGM) said no shareholder with less than 40,000 shares was contacted. I voted my 10 against at the meeting given the lack of respect shown to small shareholders. No comment was offered on the staff voting component. Watch video of exchange via Twitter.

Q4. Why weren't shareholders offered a best practice hybrid AGM today, rather than just this virtual format? On such a momentous occasion for the company, it would have been good to meet the directors and advisers assembled today in person? Many public company constitutions don't allow for virtual AGMs. When was our constitution changed to enable this online meeting format to occur?

Answer: They're a conservative penny pinching lot at SDI. They cited cost savings 3 times in 27 minutes. They hoarded $14m in franking credits to conserve cash (foolish, they'll now be lost), went to the NSW Supreme Court to save money and ran a virtual scheme meeting to save money as well. Strange, given that so many people were assembled in the room - including two from the financial adviser and two lawyers who'd been flown down from Sydney. It would have cost sod all more to allow for half a dozen retail shareholders to join them in the room. The respondent said the constitution was changed a few years ago. It only got through because the Cheetham family used their controlling 46% stake to dominate that vote. More than a dozen other attempts have been voted down at public company AGMs - see full list. Watch video of exchange via Twitter.

Q5. Throughout its history, SDI has been controlled by the Cheetham family. Could a representative of the family comment on the issue of "why now?" in terms of selling control to a Chinese company. Have they got close to selling at any time in the past and who initiated the discussions: SDI or Sinosera?

Answer: With her father and 46% shareholder Jeff Cheetham in the room, SDI CEO Samantha Cheetham took this question, explaining it was a family decision to sell and SDI initiated the sales process. This was a good transparent response, as were most of these answers. Watch video of exchange via Twitter.

The only other shareholder to lob a question was Brett Westbury and it was a good one about franking credits and dividends

Rule number 1 in foreign takeovers is to distribute all the franking credits. SDI didn't even partially distribute the $14m. This answer cited the need to preserve cash, which was a persistent theme of the meeting. Suspect the tax planning of the controlling Cheetham family may also be a factor. They own 46% and have circa $80m coming their way. Surely the Chinese bidder would have agreed to cut the purchase price by $14m to facilitate a $14m special fully franked dividend. It's pretty obvious and virtually every other takeover does this now.

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