atans1

Why are the Glaziers like the PAP?

In Corporate governance, Footie, Political governance on 22/09/2011 at 8:08 am

The antics of the Glaziers (the owners of MU, in case you are not into footie) in trying to ensure that post-IPO, they can “fix” minority shareholders reminds me of the PAP’s attempts in the late 1980s to restrict the choice of voters.

When faced with the possibilty of losing more than a few seats in Parly, they resorted to Group Representative Constituencies (GRCS), where voters were forced to vote for a group of MPs headed by one (possibly two) cabinet ministers, not an individual MP. Over the years, the system was used to introduce such MPs like Rin Tin Tin (aka Kate Spade), “Waz so great abt NS?” Puthu, and “No money, no dignity” Lim. GRCs worked for the PAP until this year, when the PAP lost a GRC, losing five seats. Two cabinet ministers and one junior minister lost their seats in Parly.

Well the attempt to introduce two classes of shares (with different voting rights) and when that failed, to issue non-voting preference shares (that unusually do not carry a dividend that is fixed and cumulative*) indicates that the Glazers are just as concerned as the PAP about the consequences of the unwashed masses having the vote to push them around.

Too bad for conspiracy theorists that the Glaziers are Jews. Otherwise, it could be spun that they are related to one Harry Lee, the master architect of the GRCs.   

But seriously, there is a link that conspiracy theorists can spin around. Our very own SGX that has been assidiously courting, then faciltating the Glazers, is 23.5%  owned by Temasek. Temasek cannot vote its Temasek shares, but that’s only a detail to conspiracy theorists. After all, a senior SGX official was from Temasek. And Temasek’s president was SGX’s ex-CEO. And conspiracy theorists know who owns Temask, don’t they?

*These characteristics make them more like common shares. The reason why preference shares carry fixed dividends and why dividends are cumulative is to make them safer investments. And to compensate holders for the absence of voting rights, and the inability to share in the gains that can accrue to ordinary shareholders. Absent  dividends that are fixed and cumulative; they are like common shares absent the voting rights and the potentially unlimited upside.

To be fair though,  if the company is liquidated, the preferential shareholders will have priority over ordinary shareholders when assets are divided. Unless the Glaziers have gotten rid of this too,

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  1. Great analogy in linking the ManU IPO voting shares rights to our very own GRCs!
    It is indeed akin to the winning MPs vs defeated GROs. However, the defeated GROs may look like the minority shareholder with no preference or priority rights, under the guise of PA, the family patriarch can still favor them. In the case of ManU buyers of the 2nd tier votes, that’s not the case. They are basically willing payers towards Glazier’s team large bonuses and salaries, not to mention the debts. But when it comes to voting rights, pray that they don’t end up like the lehman bond-buyers.

  2. https://www.facebook.com/notes/sg-electorate/scmp-fair-play-to-hkex-when-it-comes-to-level-playing-field/161651390589699

    Read this from HK SCMP. It quotes “And if this portrays Singapore as a bit of a cowboy market, well, it is. They can talk up a storm down there about their standards, and maybe they have some, but those standards are pretty low. A reputable exchange does not accept shareholding structures that undermine the voting rights of the investing public.”

    LOL, so true. We always encourage Corporate theft. Like I say “If you were more aware, your votes would be wiser” lah..

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