Spotlight on listed companies

As a minority shareholder in a number of local companies I would like to express my utter disappointment at the way certain matters are handled by local listed companies. The recent takeover of Grand Harbour Marina by Camper and Nicholson is one such instance.

When the shares were offered to the public some months ago the offering document mentioned that the original shareholders would not attempt to dispose of their shares for a stipulated timeframe. Yet, just some months down the line they did just that.

To add insult to injury the shares were offered to the public at 70c while the shares sold to Camper and Nicholson were offloaded at a much cheaper price. Why the difference?

These takeovers normally entail a lengthy due diligence process so I find it hard to stomach that the negotiations were not underway at the time of the initial public offering, especially since Camper and Nicholson were already involved in the company. Now we are faced with a mandatory bid that might very well see the company being delisted.

The relevant authorities seem to be quite happy with the way this matter has unfolded but I do not share this view. Minority shareholders deserve better than this. On an unrelated matter, I could not contain my disbelief at the way the directors of a local company were appointed during the latest annual general meeting (AGM). Amazingly the elected directors attracted pretty much the same number of votes! It beggars belief quite frankly. Yet, a perfectly competent director did not make the grade and a new face has taken that place.

It is no secret that many shareholders choose not to attend the AGM and send a proxy to the chairman who, thus, votes on their behalf. It is my contention that these votes by proxy are instrumental in appointing the directors and put the chairman in a position to control the composition of the board. In the wrong hands this power can potentially result in a situation of "I scratch your back if you scratch mine" that is hardly desirable in a listed company entrusted with millions of liri of hard-earned shareholder money. The least the chairman could do is to transparently declare how he or she has cast these votes by proxy and provide suitable motivations for the choices made.

The Malta Stock Exchange and the Malta Financial Services Authority should ensure a suitable regulation is introduced in the interest of transparency and good corporate governance.