Hong Fok minorities leave AGM over directors' pay They raise concerns key management are getting paid in excess of $10m
By kenneth lim
DISGRUNTLED minority shareholders of developer Hong Fok Corp stormed out of the company's annual general meeting (AGM) after directors thwarted their attempt to reject key resolutions amid concerns about directors' remuneration.
"Shareholders rejected the directors' report and the audited results by show of hands . . . so the chairman proposed that all the resolutions be put through the poll," said minority shareholder Mano Sabnani, chief executive of advisory firm Rafflesia Holdings.
Directors of Hong Fok could not be reached for comment.
Mr Mano said minority shareholders yesterday raised concerns that Hong Fok's key management has been getting paid in excess of $10 million in total for the past few years - the 2011 annual report for Hong Fok said employee benefits paid to key management, excluding directors fees, amounted to $12.1 million in 2011.
BT had an article which said the net profits in 2010 and 2011 were derived from revaluation gains. Such pathetic results, yet the directors paid themselves more & more. This company is sinking lower and lower in public esteem.
Meanwhile, in another meeting, a financial adviser and savvy stock-picker friend of mine said: "I will never buy stocks like Hong Fok." I asked: "Why? They are trading at below book value. That's what most value investors look for, right?"
"The directors pay themselves millions every year, in good times or bad," he said. A BT report back in 1998, one year after the Asian financial crisis began, noted that at Hong Fok, where the group suffered hefty losses of $14.9 million compared with profits of $7.9 million the year before, its directors picked up a bigger tab.
I went to take a look at the latest annual report of Hong Fok which owns International Building, The Concourse and Henderson Industrial Park and in Hong Kong, the Memo Building. Its market capitalisation is about $356 million. Last year, its group revenue totalled $129 million. Total assets in the group amounted to $1.75 billion. Its net profit reported was $139.7 million, but $151.1 million came from gain on revaluation of investment properties. It would have been in the red without the revaluation gain. And the $151 million came on top of another revaluation gain of $88.2 million in 2010.
On its board were seven directors, four of them with executive roles. They are Cheong Kim Pong, Cheong Pin Chuan, Cheong Hooi Kheng and Cheong Sim Eng. The non-executive directors are Jackson Lee, Tan Tock Han and Lai Meng Seng.
Here are their fees. Mr Cheong Kim Pong and Mr Cheong Sim Eng were paid between $2.75 million and $3 million. Mr Cheong Pin Chuan took home between $2 million and $2.25 million. Meanwhile, Ms Cheong Hooi Kheng received $1.75 million to $2 million.
As for the non-executive directors, their fees were less than $250,000 each.
Assuming that each of the executive directors took home the mid-point of their remuneration range, the total directors fees amounted to $9.75 million.
The executives are paid handsomely too. The personal assistant to directors took home between $250,000 and $500,000. So did the vice-president of projects and vice-president of accounts and finance/company secretary, and vice-president of marketing.
The vice-president of property maintenance was richer by $500,000 to $750,000. And the vice-president of administration and personnel took home a whopping $750,000 to $1 million!
Hong Fok disclosed that the vice-president of administration and personnel, vice-president of property maintenance and personal assistant to directors are related to executive directors Mr Cheong Kim Pong, Mr Cheong Pin Chuan, Ms Cheong and Mr Cheong Sim Eng.
Looks like attending AGMs and speaking out for minority shareholders' interest is getting more popular. Way to go!
The Straits Times
30 Apr 2012
Controversy over Treasury China Trust AGM
A SHAREHOLDERS' meeting last week ended on a controversial note when the chairman called for a re-vote of a resolution after having declared that the company's annual general meeting (AGM) had ended.
Dissatisfied minority shareholder Mano Sabnani, who attended Treasury China Trust's AGM last Friday, claimed that the proper procedures were not followed.
He had earlier proposed an amendment to the third and last resolution, to limit certain share issuances from 20 per cent to 10 per cent of capital.
This amended resolution was seconded and then approved by a show of hands.
However, Mr Sabnani claimed that vice-chairman Stuart Leckie, who presided over the meeting, subsequently confirmed that the AGM was closed but then asked for the earlier resolution to be voted by poll - in its original form.
This had the effect of overriding the amended resolution that had been passed.
'(The chairman) belatedly decided that he wanted a poll on the third resolution relating to the issuance of shares. Polling on this resolution was carried out (after the) closure of the AGM, which made it out of order,' said Mr Sabnani.
'So (they made) two mistakes: when you call for a show of hands and you've agreed to a modification (to the resolution) and people have voted for it, you can't say sorry, I have a lot of proxies, I want to go back to polling the original,' said Mr Sabnani.
Voting by proxy occurs when a shareholder appoints someone he trusts to vote on his behalf.
'Second, when you close the AGM, you can't go back to open it again when the AGM is all over... Some shareholders would have left.'
At press time, Treasury China Trust had yet to make its regulatory filing on the outcome of the AGM.
Haha , Mano Sabnani again. I have seen Mano in action and I can vouch he is knowledgeable and fearless. The SGX has recovered to 3000 pts, so it’s ridiculous to allow the mgt to place out shares at 20% discount. As for Hong Fok, the $10 million payment to directors is far too high, esp when the “profit “ comes from property revaluation . So if a global crisis hit next yr, will the property be revalued downwards and directors pay back the $$$ lol?
Investors should attend AGMs whenever they can ( esp non-Blue Chip counters ) so that they can grille the mgt and directors. Frankly, retail investors have little chance to influence the mgt, but at least you can roughly judge the qualities of the CEO/CFO/IDs by the way they handle tough questions. Annual reports only reflect historical data, but the future direction depends on the CEO.
they always hold AGM during office hours. How to go? I'd love to go to QM and Fujian Zhenyun AGM. I hope Next Insight will report on these 2 AGM too. What say you, Admin?
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