Our Feature story this month is on Metcash.
On Friday 5th September 2011, the Metcash Limited (the company behind IGA and Mitre 10) Annual General Meeting would have been one of the first to record a shareholder vote of 25% or more against the executive remuneration report, since enactment of the new “two strikes” legislation. However, Metcash appears to have dodged the bullet. Please read the below Media Release, ASA proxy totals, the letter from Metcash in response to the ASA Media Release, and the ASA CEO overview of the key issues.
Please click here for the latest ASA Media Release on Metcash.
Please click here for the total proxy voting.
Please click here for the Metcash Letter of response addressed to the ASA regarding this issue.
Please click here for the latest response in the Media from Minister Bradbury's office
ASA CEO Vas Kolesnikoff wishes to address the key issues as follows:
· Based on the proxy position disclosed to the ASX and the ASA's intention to direct 2.8 million undirected proxies against the resolution, then the against tally is greater than 25 percent (roughly 112.9/447.9 or 25.2 percent). Assuming the 4.5 million proxies of other shareholders were to be voted in favour, there are still enough unknown votes to leave the final result unclear in reference to the two strikes legislation. Given that the company knew both ASA’s recommendation and proxy position, there is clearly argument for disclosure and a poll to be called.
· There are also questions over whether 2.347 million directed abstain votes should be included in the denominator, so that the original directed proxy position against the resolution would be even higher, with enough unknown votes to leave the final result unclear and again necessitating a poll to be called.
· In reference to 6 million votes held by other shareholders in attendance of which 4.5 million were to be voted in favour, if this is referring to undirected proxies then it makes no difference to the tally in the denominator above as it already includes undirected proxies and we already assume they are all voted in favour of the resolution, other than those held by the ASA. If, on the other hand, the reference is to voters in the room without proxies lodged who would have voted for the resolution on a poll, then there appears no way to verify this statement without a poll having been called. This fact would give cause for a chairman to call a poll, referencing the materiality of the votes to the determination of the final result for the purposes of the two strikes legislation. I am advised also to this point, that ASIC has made a declaration in a previous Novogen case, which is highly relevant to this case.
· It may now be necessary for further reference to ASIC to issue a guidance statement clarifying the procedure for voting as between show of hands or poll when the significance of the against vote is known to be material to the determination of the final outcome for the purposes of the legislation. The result can only be determined after all directed and undirected proxies are cast at AGM, otherwise the two strikes legislation is rendered meaningless without full determination of the voting of all shareholders in a material case known to the company.
· The ASA will release a Practice Note to members with immediate effect to the extent that a poll will be called in accordance with the Corporations Act, where the proxy voting position is not disclosed or known to the meeting.
Have you read the latest Media Releases from the ASA?
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