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The Shareholders’ Association has lambasted Rakon for releasing its disappointing financial forecast before last Friday’s shareholders’ meeting – but says there is nothing it can do to force another vote.
An hour before Friday’s annual shareholders meeting, and a special meeting to vote on the partial sale of its China joint venture company, the company announced to the sharemarket its forecast for a $54 million after-tax loss for the financial year.
Shareholders’ Association acting chairman Grant Diggle says it is disappointing shareholders who had cast proxy votes ahead of Friday's meeting did not know about the forecasted losses, however the company appears to have conducted itself legally and within NZX's continuous disclosure rules.
He says the company told the association it only learnt the information immediately before it disclosed to the market, because it was divulged at that morning’s board meeting.
“The shareholders' association would expect companies would arrange their affairs and arrange and schedule their meetings so their shareholders would have all the information they require to make an informed decision before proxy voting closes, not after proxy voting closes, which was the case in this case.”
Mr Diggle says the last minute release of significant information robbed shareholders who had already cast proxy votes the chance to reconsider. He also described the continuation of poor results as “extremely serious.”
Rakon chairman Bryan Mogridge and executive director Darren Robinson were up for re-election at the meeting – elections that the association opposed.
About 17% of shareholders voted against Mr Mogridge’s re-election, while 19% voted against Mr Robinson. New director Herb Hunt had 99% endorsement.
Mr Diggle says Rakon’s shareholders have sent a powerful message to the board that they are displeased with the performance of the company and are looking for either an improvement in performance or a change in the board’s composition.
At Friday’s meeting, Mr Mogridge assured frustrated shareholders there would be changes at board level if the company was not making a profit in two years.
The Robinson family, who have three board representatives, hold about 23% of the company while the entire board holds about 30% of shares.
One angry shareholder at Friday’s meeting, Laurie McEntee, who has held Rakon shares since its 2006 IPO, told directors the company had gone from being a sharemarket darling to a disaster.