Shareholder Invites Opposition

Press, Volume CVIII, Issue 31726, 9 July 1968, Page 16

Shareholder Invites Opposition

Concern about the proposal to amend the Articles of Association of U.E.B. Industries, Ltd, at the forthcoming annual meeting, thereby increasing the preference dividend, was expressed by a Wellington shareholder, Mr T. M. Gault, in a statement last Friday.

‘The amount is unimportant" said Mr Gault “It is wrong, in principle, to alter rights attaching to classes of shares after shareholders have invested on the basis of existing rights. “The reason for the proposal put forward in the chairman's report is unacceptable. “The proposal clearly stems from pressure from large preference shareholders, also with substantial ordinary shareholdings. For its success those responsible for it will rely upon the apathy of ordinary shareholders. “Best Of Both Worlds” “The proposal is designed to give preference shareholders the best of both worlds “They purchase shares with specified income earning rights and specified priority as to dividend, and 1 assume contribution on winding up Now that the income appears low in comparison with that earned by the ordinary shares they want an increase without anv lessening of security

“On the other hand, should the company experience lean times so that the preference shareholders enjoy greater comparative income, there would be no possibility of the basic preference dividend being reduced. “If other companies in New Zealand and Australia which have taken this step are any indication, then this will not be the last time it is done The more easily the proposed resolutions are passed, the sooner will be the next time Opposition Invited “While it may now be too late to organise the necessary 25 per cent of votes to defeat the motions, it is not too late to show opposition to them. “I shall be at the meeting in Auckland opposing the motions. I shall be happy to accept proxies of any ordinary shareholders who are anxious to protect their investment from erosion in this way.

“1 already have a number of proxies from people who share my concern. “My hope is that institutions holding ordinary shares will recognise their obligations to their own members to oppose this proposal.”