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At TVB's AGM last week, despite the foreign ownership restrictions which made it difficult to vote, investors voted against the general general issue mandate by an estimated margin of 80% to 20%, the 7th index win for Project Vampire.

Vampire bites TVB
4th June 2003

For the 7th time this season, investors in a Hang Seng Index company, this time Television Broadcasts Limited (TVB, 0511) have voted against the general mandate, as we show below.

For readers not familiar with it, Project Vampire (Vote Against Mandate for Placings, Issues by Rights Excepted) urges shareholders to vote against the general share issue mandate unless it complies with our recommendations, based on international best practice, which are:

  1. The mandate to issue shares for cash, other than by a rights issue, shall be in respect of not more than 5% of the issued shares a the time of the mandate

  2. The discount for shares issued other than by a rights issue shall not exceed 5%.

  3. The mandate to issue shares for other purposes, including acquisitions, shall be for not more than 20% of the issued shares

TVB is 26.00% owned by Shaw Brothers (Hong Kong) Limited (0080), controlled by Run Run Shaw, Chairman of both companies, who also owns 6.23% of TVB. The widow of the founder owns 3.95%, and other directors together own 0.98%, taking the total insider ownership to 162,786,387 shares, or 37.17% of the company.

Assuming they voted in favour of their board's proposal, and deducting that from the votes "in favour" in the official poll results, then the voting of independent investors on the issue mandate was as follows:

  Votes Share
In favour 1,245,821 20.35%
Against 4,875,379 79.65%
Total 6,121,200 100.00%

In other words, public investors voted by a margin of almost 4 to 1 against the general issue mandate. Total votes cast were just 2.22% of the free float, but given the foreign ownership restrictions explained in our voting advice article, it is likely that most public shareholders were unable to pre-register and hence were not qualified to vote on the poll.

Copyright Webb-site.com, 2003

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