Yesterday, I was at the Macquarie International Infrastructure Fund (MIIF) Special General Meeting (SGM) that saw two investment fund managers trying to get three of their nominees appointed to the board.
It was a hugely disappointing outcome to see the nominees failing in their bid.
Brief facts of the case
- The funds had been shareholders of the fund for two years and wanted to help the company bridge the discount of the trading price to the NTA. They are long term value investors.
- They have in the past corresponded with the board giving their ideas and attempting to get board representation. This was turned down so they convened a SGM .
- The present board opposed the nomination as they defended their own track record and said that adding new members to the board would change the dynamics of the board. They admitted that the candidates were well qualified. The main reason behind the opposition was the “dynamics” factor which I found baffling. The board was very defensive on this to the point of sending multiple letters to shareholders and putting up advertisements on the media (at our expense) asking us to vote against the nominations.
- The present board said that as a result of discussions with other shareholders recently, they have decided to increase the number of directors by one. The search for a suitable director will commence after the meeting. They will appoint a search firm for this. My point of contention: Why do we need to do this when you have three candidates here who are qualified, whose interests are aligned with the shareholders (they hold more than 10% of the shares) and two of them who were present even offered to waive their director fees?
I find that the Straits Times article which reported on this was quite misleading and missed many important points.
In the article, shareholder Mano Sabnani was quoted as saying that the results of the meeting was a “good outcome”. The journalist obviously didn’t know (or choose to ignore) the various arguments that he bought up during the meeting! I do not think that Mano would have been pleased with the outcome of the voting!
This was what Mano had written in his facebook: